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Veteran-Owned Businesses Utilization

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As it relates to SURS, Senate Amendment #1 to SB 1846 makes technical changes.

SB 1846 requires public retirement systems, pension funds and investment boards to utilize veteran-owned businesses for certain contracts and services. 

Specifically, SB 1846 amends the General Provisions article of the Illinois Pension Code to add veteran-owned businesses to MWDBE utilization requirements as follows:  

  • SB 1846 adds veteran-owned businesses to the definition of an “emerging investment manager” and requires each retirement system, pension fund and investment board to establish a separate utilization goal for emerging investment managers that are veteran-owned businesses.  The goal must be based on the percentage of total dollar amount of investment service contracts let to veteran-owned businesses.   The goal must be reviewed annually.
  • SB 1846 requires each retirement system, pension fund and investment board to adopt a policy with a goal for the utilization of businesses owned by veterans for all contracts and services.  The goal must be based on the percentage of total dollar amount of all contracts let to veteran-owned businesses.  The goal must be reviewed annually.
  • SB 1846 requires each retirement system, pension fund and investment board to adopt a policy that sets forth a goal for increasing the utilization of minority broker-dealers that are veteran-owned businesses.  The goal must be reviewed annually.
  • SB 1846 requires each retirement system, pension fund and investment board to adopt a policy that sets forth a goal for increasing the utilization of minority investment managers that are veteran-owned businesses.  Each retirement system, pension fund and investment board must establish a separate goal for minority investment managers that are veteran-owned businesses.  The goal must be reviewed annually.
  • SB 1846 provides that aspirational goals also apply to veterans.  Specifically, veteran-owned businesses are included in the aspiration goal to use emerging investment managers for not less than 20 percent of total funds under management.  Furthermore, veterans are included in the aspirational goal that not less than 20 percent of investment advisors be minorities, women and persons with disabilities.  Finally, veterans are included in the aspirational goal to utilize businesses owned by minorities, women, veterans and persons with disabilities for not less than 20 percent of contracts awarded for information technology services, accounting services, insurance brokers, architectural and engineering services, and legal services.

SB 1846 also requires the utilization of veteran-owned businesses to be disclosed by investment advisors, consultants, and private market funds prior to the award of a contract for investment services, consulting services, or commitment to a private market fund by a retirement system, pension fund, or investment board.  Such disclosures must be considered, within the bounds of financial and fiduciary prudence, prior to the awarding of a contract for investment services, consulting services or commitment to a private market fund.

Finally, SB 1846 requires each consultant retained by the board of a retirement system, pension fund and investment board to annually disclose information regarding the utilization of veteran-owned businesses.   Such disclosures must be made by the consultant prior to the award of a contract for consulting services by the board of a retirement system, pension fund or investment board.  Such disclosures must also be considered, within the bounds of financial and fiduciary prudence, prior to the awarding of a contract for consulting services.

SB 1846 defines a “veteran-owned business” as a business which is at least 51 percent owned by one or more veterans, or, in the case of a corporation, at least 51 percent of the stock in which is owned by one or more veterans; and the management and daily business operations of which are controlled by one or more of the veterans who own it.   SB 1846 defines a “veteran” as 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 six 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.  SB 1846 defines the “armed forces of the United States” as 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 must also be considered service in the armed forces.  Finally, SB 1846 defines “time of hostilities with a foreign country” as 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 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.

SB 1846 takes effect immediately upon becoming law.

Sponsor: 
Senator Paul Schimpf