104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026 HB2780 Introduced , by Rep. Martin J. Moylan SYNOPSIS AS INTRODUCED: 40 ILCS 5/1-110.13 new40 ILCS 5/1-110.16 Amends the General Provisions Article of the Illinois Pension Code. With regard to the 5 State-funded retirement systems, provides that the following are forbidden entities for purposes of investment and certain other transactions: Hamas; any company or entity that is wholly or partially managed or controlled by Hamas; any company identified by the Office of Foreign Assets Control in the United States Department of the Treasury as sponsoring terrorist activities in conjunction with Hamas or under specified regulations pertaining to terrorism sanctions; any company that has been fined, penalized, or sanctioned by the Office of Foreign Assets Control in the United States Department of the Treasury for any violation of any United States rules and restrictions relating to Hamas that occurred at any time following the effective date of the amendatory Act; or any company that has business operations that involve contracts with or the provision of supplies or services to Hamas, companies in which Hamas has any direct or indirect equity share, or consortiums or projects commissioned by Hamas. Provides that a retirement system shall not transfer or disburse funds to, deposit into, acquire any bonds or commercial paper from, or otherwise loan to or invest in any entity unless a certifying company certifies to the retirement system that: (1) with respect to investments in a publicly traded company, the certifying company has relied on information provided by an independent researching firm that specializes in global security risk; and (2) 100% of the retirement system's assets for which the certifying company provides services or advice are not and have not been invested or reinvested in any forbidden entity at any time after 4 months after the effective date of the amendatory Act. Requires the Illinois Investment Policy Board to make its best efforts to identify all Hamas-restricted companies and include those companies in the list of restricted companies for purposes of investment distributed to each retirement system and the Illinois State Board of Investment. Makes conforming changes. LRB104 11964 JDS 22057 b A BILL FOR 104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026 HB2780 Introduced , by Rep. Martin J. Moylan SYNOPSIS AS INTRODUCED: 40 ILCS 5/1-110.13 new40 ILCS 5/1-110.16 40 ILCS 5/1-110.13 new 40 ILCS 5/1-110.16 Amends the General Provisions Article of the Illinois Pension Code. With regard to the 5 State-funded retirement systems, provides that the following are forbidden entities for purposes of investment and certain other transactions: Hamas; any company or entity that is wholly or partially managed or controlled by Hamas; any company identified by the Office of Foreign Assets Control in the United States Department of the Treasury as sponsoring terrorist activities in conjunction with Hamas or under specified regulations pertaining to terrorism sanctions; any company that has been fined, penalized, or sanctioned by the Office of Foreign Assets Control in the United States Department of the Treasury for any violation of any United States rules and restrictions relating to Hamas that occurred at any time following the effective date of the amendatory Act; or any company that has business operations that involve contracts with or the provision of supplies or services to Hamas, companies in which Hamas has any direct or indirect equity share, or consortiums or projects commissioned by Hamas. Provides that a retirement system shall not transfer or disburse funds to, deposit into, acquire any bonds or commercial paper from, or otherwise loan to or invest in any entity unless a certifying company certifies to the retirement system that: (1) with respect to investments in a publicly traded company, the certifying company has relied on information provided by an independent researching firm that specializes in global security risk; and (2) 100% of the retirement system's assets for which the certifying company provides services or advice are not and have not been invested or reinvested in any forbidden entity at any time after 4 months after the effective date of the amendatory Act. Requires the Illinois Investment Policy Board to make its best efforts to identify all Hamas-restricted companies and include those companies in the list of restricted companies for purposes of investment distributed to each retirement system and the Illinois State Board of Investment. Makes conforming changes. LRB104 11964 JDS 22057 b LRB104 11964 JDS 22057 b A BILL FOR
104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026 HB2780 Introduced , by Rep. Martin J. Moylan SYNOPSIS AS INTRODUCED:
40 ILCS 5/1-110.13 new40 ILCS 5/1-110.16 40 ILCS 5/1-110.13 new 40 ILCS 5/1-110.16
40 ILCS 5/1-110.13 new
40 ILCS 5/1-110.16
Amends the General Provisions Article of the Illinois Pension Code. With regard to the 5 State-funded retirement systems, provides that the following are forbidden entities for purposes of investment and certain other transactions: Hamas; any company or entity that is wholly or partially managed or controlled by Hamas; any company identified by the Office of Foreign Assets Control in the United States Department of the Treasury as sponsoring terrorist activities in conjunction with Hamas or under specified regulations pertaining to terrorism sanctions; any company that has been fined, penalized, or sanctioned by the Office of Foreign Assets Control in the United States Department of the Treasury for any violation of any United States rules and restrictions relating to Hamas that occurred at any time following the effective date of the amendatory Act; or any company that has business operations that involve contracts with or the provision of supplies or services to Hamas, companies in which Hamas has any direct or indirect equity share, or consortiums or projects commissioned by Hamas. Provides that a retirement system shall not transfer or disburse funds to, deposit into, acquire any bonds or commercial paper from, or otherwise loan to or invest in any entity unless a certifying company certifies to the retirement system that: (1) with respect to investments in a publicly traded company, the certifying company has relied on information provided by an independent researching firm that specializes in global security risk; and (2) 100% of the retirement system's assets for which the certifying company provides services or advice are not and have not been invested or reinvested in any forbidden entity at any time after 4 months after the effective date of the amendatory Act. Requires the Illinois Investment Policy Board to make its best efforts to identify all Hamas-restricted companies and include those companies in the list of restricted companies for purposes of investment distributed to each retirement system and the Illinois State Board of Investment. Makes conforming changes.
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A BILL FOR
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1 AN ACT concerning public employee benefits.
2 Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4 Section 5. The Illinois Pension Code is amended by
5 changing Section 1-110.16 and by adding Section 1-110.13 as
6 follows:
7 (40 ILCS 5/1-110.13 new)
8 Sec. 1-110.13. Transactions prohibited by retirement
9 systems; Hamas.
10 (a) The Government of the United States has determined
11 that Hamas is a Foreign Terrorist Organization that sponsors
12 terrorism and genocide. The General Assembly finds that acts
13 of terrorism have caused injury and death to Illinois and
14 United States residents who serve in the United States
15 military, and pose a significant threat to safety and health
16 in Illinois. The General Assembly finds that public employees
17 and their families, including police officers and
18 firefighters, are more likely than others to be affected by
19 acts of terrorism. The General Assembly finds that Hamas
20 continues to solicit investment and commercial activities by
21 forbidden entities, including private market funds. The
22 General Assembly finds that investments in forbidden entities
23 are inherently and unduly risky, not in the interests of
104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026 HB2780 Introduced , by Rep. Martin J. Moylan SYNOPSIS AS INTRODUCED:
40 ILCS 5/1-110.13 new40 ILCS 5/1-110.16 40 ILCS 5/1-110.13 new 40 ILCS 5/1-110.16
40 ILCS 5/1-110.13 new
40 ILCS 5/1-110.16
Amends the General Provisions Article of the Illinois Pension Code. With regard to the 5 State-funded retirement systems, provides that the following are forbidden entities for purposes of investment and certain other transactions: Hamas; any company or entity that is wholly or partially managed or controlled by Hamas; any company identified by the Office of Foreign Assets Control in the United States Department of the Treasury as sponsoring terrorist activities in conjunction with Hamas or under specified regulations pertaining to terrorism sanctions; any company that has been fined, penalized, or sanctioned by the Office of Foreign Assets Control in the United States Department of the Treasury for any violation of any United States rules and restrictions relating to Hamas that occurred at any time following the effective date of the amendatory Act; or any company that has business operations that involve contracts with or the provision of supplies or services to Hamas, companies in which Hamas has any direct or indirect equity share, or consortiums or projects commissioned by Hamas. Provides that a retirement system shall not transfer or disburse funds to, deposit into, acquire any bonds or commercial paper from, or otherwise loan to or invest in any entity unless a certifying company certifies to the retirement system that: (1) with respect to investments in a publicly traded company, the certifying company has relied on information provided by an independent researching firm that specializes in global security risk; and (2) 100% of the retirement system's assets for which the certifying company provides services or advice are not and have not been invested or reinvested in any forbidden entity at any time after 4 months after the effective date of the amendatory Act. Requires the Illinois Investment Policy Board to make its best efforts to identify all Hamas-restricted companies and include those companies in the list of restricted companies for purposes of investment distributed to each retirement system and the Illinois State Board of Investment. Makes conforming changes.
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A BILL FOR
40 ILCS 5/1-110.13 new
40 ILCS 5/1-110.16
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1 public pensioners and Illinois taxpayers, and against public
2 policy. The General Assembly finds that Hamas's capacity to
3 sponsor terrorism and genocide depends on or is supported by
4 the activities of forbidden entities. The General Assembly
5 further finds and re-affirms that the people of the State,
6 acting through their representatives, do not want to be
7 associated with forbidden entities, genocide, and terrorism.
8 (b) For purposes of this Section:
9 "Business operations" means maintaining, selling, or
10 leasing equipment, facilities, personnel, or any other
11 apparatus of business or commerce to Hamas.
12 "Certifying company" means a company that (1) directly
13 provides asset management services or advice to a retirement
14 system or (2) as directly authorized or requested by a
15 retirement system (A) identifies particular investment options
16 for consideration or approval; (B) chooses particular
17 investment options; or (C) allocates particular amounts to be
18 invested. If no company meets the criteria set forth in this
19 paragraph, then "certifying company" means the retirement
20 system officer who, as designated by the board, executes the
21 investment decisions made by the board, or, in the
22 alternative, the company that the board authorizes to complete
23 the certification as the agent of that officer.
24 "Company" is any entity capable of affecting commerce,
25 including, but not limited to: (i) a government, governmental
26 agency, natural person, legal person, sole proprietorship,
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1 partnership, firm, corporation, subsidiary, affiliate,
2 franchisor, franchisee, joint venture, trade association,
3 financial institution, utility, public franchise, provider of
4 financial services, trust, or enterprise; and (ii) any
5 association thereof.
6 "Division" means the Public Pension Division of the
7 Department of Insurance.
8 "Forbidden entity" means any of the following:
9 (1) Hamas;
10 (2) any company or entity that is wholly or partially
11 managed or controlled by Hamas;
12 (3) any company (i) identified by the Office of
13 Foreign Assets Control in the United States Department of
14 the Treasury as sponsoring terrorist activities in
15 conjunction with Hamas or, with regard to Hamas, under the
16 Global Terrorism Sanctions Regulations (31 CFR Part 594)
17 or the Foreign Terrorist Organization Sanctions
18 Regulations (31 CFR Part 597); or (ii) fined, penalized,
19 or sanctioned by the Office of Foreign Assets Control in
20 the United States Department of the Treasury for any
21 violation of any United States rules and restrictions
22 relating to Hamas that occurred at any time following the
23 effective date of this amendatory Act of the 104th General
24 Assembly; or
25 (4) any company that has business operations that
26 involve contracts with or the provision of supplies or
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1 services to Hamas, companies in which Hamas has any direct
2 or indirect equity share, or consortiums or projects
3 commissioned by Hamas.
4 "Forbidden entity" does not include: (A) mutual funds that
5 meet the requirements of item (iii) of paragraph (13) of
6 Section 1-113.2; and (B) companies that transact business with
7 Hamas under the law, license, or permit of the United States,
8 including a license from the United States Department of the
9 Treasury, and companies, except Hamas, that are certified as
10 Non-Government Organizations by the United Nations or that
11 engage solely in (i) the provision of goods and services
12 intended to relieve human suffering or to promote welfare,
13 health, religious and spiritual activities, and education or
14 humanitarian purposes; or (ii) journalistic activities.
15 "Hamas" means the organizations commonly known as Hamas
16 and Palestinian Islamic Jihad that are subject to sanction or
17 other restrictions placed on commercial activity imposed by
18 the United States government due to an executive or
19 congressional declaration as a Foreign Terrorist Organization.
20 "Private market fund" means any private equity fund,
21 private equity fund of funds, venture capital fund, hedge
22 fund, hedge fund of funds, real estate fund, or other
23 investment vehicle that is not publicly traded.
24 "Retirement system" means the General Assembly Retirement
25 System, the State Employees' Retirement System of Illinois,
26 the State Universities Retirement System, the Teachers'
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1 Retirement System of the State of Illinois, and the Judges
2 Retirement System of Illinois.
3 (c) A retirement system shall not transfer or disburse
4 funds to, deposit into, acquire any bonds or commercial paper
5 from, or otherwise loan to or invest in any entity unless, as
6 provided in this Section, a certifying company certifies to
7 the retirement system that, (1) with respect to investments in
8 a publicly traded company, the certifying company has relied
9 on information provided by an independent researching firm
10 that specializes in global security risk and (2) 100% of the
11 retirement system's assets for which the certifying company
12 provides services or advice are not and have not been invested
13 or reinvested in any forbidden entity at any time after 4
14 months after the effective date of this amendatory Act of the
15 104th General Assembly.
16 The certifying company shall make the certification
17 required under this subsection (c) to a retirement system 6
18 months after the effective date of this amendatory Act of the
19 104th General Assembly and annually thereafter. A retirement
20 system shall submit the certifications to the Division, and
21 the Division shall notify the Director of Insurance if a
22 retirement system fails to do so.
23 (d) In addition to any other penalties and remedies
24 available under State or federal law, any transaction that
25 violates the provisions of this Section shall be against
26 public policy and voidable, at the sole discretion of the
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1 retirement system.
2 (e) This Section shall have full force and effect during
3 any period in which Hamas, or the officials of Hamas, are
4 subject to sanctions authorized under any statute or executive
5 order of the United States or until the State Department of the
6 United States confirms in the federal register or through
7 other means that Hamas is no longer subject to sanctions by the
8 government of the United States.
9 (f) If any provision of this Section or its application to
10 any person or circumstance is held invalid, the invalidity of
11 that provision or application does not affect other provisions
12 or applications of this Section that can be given effect
13 without the invalid provision or application.
14 (40 ILCS 5/1-110.16)
15 Sec. 1-110.16. Transactions prohibited by retirement
16 systems; companies that boycott Israel, for-profit companies
17 that contract to shelter migrant children, Iran-restricted
18 companies, Sudan-restricted companies, Hamas-restricted
19 companies, expatriated entities, companies that are domiciled
20 or have their principal place of business in Russia or
21 Belarus, and companies that are subject to Russian Harmful
22 Foreign Activities Sanctions.
23 (a) As used in this Section:
24 "Boycott Israel" means engaging in actions that are
25 politically motivated and are intended to penalize, inflict
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1 economic harm on, or otherwise limit commercial relations with
2 the State of Israel or companies based in the State of Israel
3 or in territories controlled by the State of Israel.
4 "Company" means any sole proprietorship, organization,
5 association, corporation, partnership, joint venture, limited
6 partnership, limited liability partnership, limited liability
7 company, or other entity or business association, including
8 all wholly owned subsidiaries, majority-owned subsidiaries,
9 parent companies, or affiliates of those entities or business
10 associations, that exist for the purpose of making profit.
11 "Company that is subject to Russian Harmful Foreign
12 Activities Sanctions" means a company that is subject to
13 sanctions under the Russian Harmful Foreign Activities
14 Sanctions Regulations (31 CFR Part 587), any Presidential
15 Executive Order imposing sanctions against Russia, or any
16 federal directive issued pursuant to any such Executive Order.
17 "Contract to shelter migrant children" means entering into
18 a contract with the federal government to shelter migrant
19 children under the federal Unaccompanied Alien Children
20 Program or a substantially similar federal program.
21 "Direct holdings" in a company means all publicly traded
22 securities of that company that are held directly by the
23 retirement system in an actively managed account or fund in
24 which the retirement system owns all shares or interests.
25 "Expatriated entity" has the meaning ascribed to it in
26 Section 1-15.120 of the Illinois Procurement Code.
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1 "Hamas-restricted company" means a company that meets the
2 qualifications under Section 1-110.13 of this Code.
3 "Illinois Investment Policy Board" means the board
4 established under subsection (b) of this Section.
5 "Indirect holdings" in a company means all securities of
6 that company that are held in an account or fund, such as a
7 mutual fund, managed by one or more persons not employed by the
8 retirement system, in which the retirement system owns shares
9 or interests together with other investors not subject to the
10 provisions of this Section or that are held in an index fund.
11 "Iran-restricted company" means a company that meets the
12 qualifications under Section 1-110.15 of this Code.
13 "Private market fund" means any private equity fund,
14 private equity funds of funds, venture capital fund, hedge
15 fund, hedge fund of funds, real estate fund, or other
16 investment vehicle that is not publicly traded.
17 "Restricted companies" means companies that boycott
18 Israel, for-profit companies that contract to shelter migrant
19 children, Iran-restricted companies, Sudan-restricted
20 companies, Hamas-restricted companies, expatriated entities,
21 companies that are domiciled or have their principal place of
22 business in Russia or Belarus, and companies that are subject
23 to Russian Harmful Foreign Activities Sanctions.
24 "Retirement system" means a retirement system established
25 under Article 2, 14, 15, 16, or 18 of this Code or the Illinois
26 State Board of Investment.
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1 "Sudan-restricted company" means a company that meets the
2 qualifications under Section 1-110.6 of this Code.
3 (b) There shall be established an Illinois Investment
4 Policy Board. The Illinois Investment Policy Board shall
5 consist of 7 members. Each board of a pension fund or
6 investment board created under Article 15, 16, or 22A of this
7 Code shall appoint one member, and the Governor shall appoint
8 4 members. The Governor shall designate one member of the
9 Board as the Chairperson.
10 (b-5) The term of office of each member appointed by the
11 Governor, who is serving on the Board on June 30, 2022, is
12 abolished on that date. The terms of office of members
13 appointed by the Governor after June 30, 2022 shall be as
14 follows: 2 initial members shall be appointed for terms of 2
15 years, and 2 initial members shall be appointed for terms of 4
16 years. Thereafter, the members appointed by the Governor shall
17 hold office for 4 years, except that any member chosen to fill
18 a vacancy occurring otherwise than by expiration of a term
19 shall be appointed only for the unexpired term of the member
20 whom he or she shall succeed. Board members may be
21 reappointed. The Governor may remove a Governor's appointee to
22 the Board for incompetence, neglect of duty, malfeasance, or
23 inability to serve.
24 (c) Notwithstanding any provision of law to the contrary,
25 beginning January 1, 2016, Sections 1-110.15 and 1-110.6 of
26 this Code shall be administered in accordance with this
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1 Section.
2 (d) By April 1, 2016, the Illinois Investment Policy Board
3 shall make its best efforts to identify all Iran-restricted
4 companies, Sudan-restricted companies, and companies that
5 boycott Israel and assemble those identified companies into a
6 list of restricted companies, to be distributed to each
7 retirement system.
8 These efforts shall include the following, as appropriate
9 in the Illinois Investment Policy Board's judgment:
10 (1) reviewing and relying on publicly available
11 information regarding Iran-restricted companies,
12 Sudan-restricted companies, and companies that boycott
13 Israel, including information provided by nonprofit
14 organizations, research firms, and government entities;
15 (2) contacting asset managers contracted by the
16 retirement systems that invest in Iran-restricted
17 companies, Sudan-restricted companies, and companies that
18 boycott Israel;
19 (3) contacting other institutional investors that have
20 divested from or engaged with Iran-restricted companies,
21 Sudan-restricted companies, and companies that boycott
22 Israel; and
23 (4) retaining an independent research firm to identify
24 Iran-restricted companies, Sudan-restricted companies,
25 and companies that boycott Israel.
26 The Illinois Investment Policy Board shall review the list
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1 of restricted companies on a quarterly basis based on evolving
2 information from, among other sources, those listed in this
3 subsection (d) and distribute any updates to the list of
4 restricted companies to the retirement systems and the State
5 Treasurer.
6 By April 1, 2018, the Illinois Investment Policy Board
7 shall make its best efforts to identify all expatriated
8 entities and include those companies in the list of restricted
9 companies distributed to each retirement system and the State
10 Treasurer. These efforts shall include the following, as
11 appropriate in the Illinois Investment Policy Board's
12 judgment:
13 (1) reviewing and relying on publicly available
14 information regarding expatriated entities, including
15 information provided by nonprofit organizations, research
16 firms, and government entities;
17 (2) contacting asset managers contracted by the
18 retirement systems that invest in expatriated entities;
19 (3) contacting other institutional investors that have
20 divested from or engaged with expatriated entities; and
21 (4) retaining an independent research firm to identify
22 expatriated entities.
23 By July 1, 2022, the Illinois Investment Policy Board
24 shall make its best efforts to identify all for-profit
25 companies that contract to shelter migrant children and
26 include those companies in the list of restricted companies
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1 distributed to each retirement system. These efforts shall
2 include the following, as appropriate in the Illinois
3 Investment Policy Board's judgment:
4 (1) reviewing and relying on publicly available
5 information regarding for-profit companies that contract
6 to shelter migrant children, including information
7 provided by nonprofit organizations, research firms, and
8 government entities;
9 (2) contacting asset managers contracted by the
10 retirement systems that invest in for-profit companies
11 that contract to shelter migrant children;
12 (3) contacting other institutional investors that have
13 divested from or engaged with for-profit companies that
14 contract to shelter migrant children; and
15 (4) retaining an independent research firm to identify
16 for-profit companies that contract to shelter migrant
17 children.
18 No later than 6 months after the effective date of this
19 amendatory Act of the 102nd General Assembly, the Illinois
20 Investment Policy Board shall make its best efforts to
21 identify all companies that are domiciled or have their
22 principal place of business in Russia or Belarus and companies
23 that are subject to Russian Harmful Foreign Activities
24 Sanctions and include those companies in the list of
25 restricted companies distributed to each retirement system.
26 These efforts shall include the following, as appropriate in
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1 the Illinois Investment Policy Board's judgment:
2 (1) reviewing and relying on publicly available
3 information regarding companies that are domiciled or have
4 their principal place of business in Russia or Belarus and
5 companies that are subject to Russian Harmful Foreign
6 Activities Sanctions, including information provided by
7 nonprofit organizations, research firms, and government
8 entities;
9 (2) contacting asset managers contracted by the
10 retirement systems that invest in companies that are
11 domiciled or have their principal place of business in
12 Russia or Belarus and companies that are subject to
13 Russian Harmful Foreign Activities Sanctions;
14 (3) contacting other institutional investors that have
15 divested from or engaged with companies that are domiciled
16 or have their principal place of business in Russia or
17 Belarus and companies that are subject to Russian Harmful
18 Foreign Activities Sanctions; and
19 (4) retaining an independent research firm to identify
20 companies that are domiciled or have their principal place
21 of business in Russia or Belarus and companies that are
22 subject to Russian Harmful Foreign Activities Sanctions.
23 No later than 6 months after the effective date of this
24 amendatory Act of the 104th General Assembly, the Illinois
25 Investment Policy Board shall make its best efforts to
26 identify all Hamas-restricted companies and include those
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1 companies in the list of restricted companies distributed to
2 each retirement system.
3 (e) The Illinois Investment Policy Board shall adhere to
4 the following procedures for companies on the list of
5 restricted companies:
6 (1) For each company newly identified in subsection
7 (d), the Illinois Investment Policy Board, unless it
8 determines by an affirmative vote that it is unfeasible,
9 shall send a written notice informing the company of its
10 status and that it may become subject to divestment or
11 shareholder activism by the retirement systems.
12 (2) If, following the Illinois Investment Policy
13 Board's engagement pursuant to this subsection (e) with a
14 restricted company, that company ceases activity that
15 designates the company to be an Iran-restricted company, a
16 Sudan-restricted company, a company that boycotts Israel,
17 an expatriated entity, or a for-profit company that
18 contracts to shelter migrant children, the company shall
19 be removed from the list of restricted companies and the
20 provisions of this Section shall cease to apply to it
21 unless it resumes such activities.
22 (3) For a company that is domiciled or has its
23 principal place of business in Russia or Belarus, if,
24 following the Illinois Investment Policy Board's
25 engagement pursuant to this subsection (e), that company
26 is no longer domiciled or has its principal place of
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1 business in Russia or Belarus, the company shall be
2 removed from the list of restricted companies and the
3 provisions of this Section shall cease to apply to it
4 unless it becomes domiciled or has its principal place of
5 business in Russia or Belarus.
6 (4) For a company that is subject to Russian Harmful
7 Foreign Activities Sanctions, if, following the Illinois
8 Investment Policy Board's engagement pursuant to this
9 subsection (e), that company is no longer subject to
10 Russian Harmful Foreign Activities Sanctions, the company
11 shall be removed from the list of restricted companies and
12 the provisions of this Section shall cease to apply to it
13 unless it becomes subject to Russian Harmful Foreign
14 Activities Sanctions.
15 (f) Except as provided in subsection (f-1) of this Section
16 the retirement system shall adhere to the following procedures
17 for companies on the list of restricted companies:
18 (1) The retirement system shall identify those
19 companies on the list of restricted companies in which the
20 retirement system owns direct holdings and indirect
21 holdings.
22 (2) The retirement system shall instruct its
23 investment advisors to sell, redeem, divest, or withdraw
24 all direct holdings of restricted companies from the
25 retirement system's assets under management in an orderly
26 and fiduciarily responsible manner within 12 months after
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1 the company's most recent appearance on the list of
2 restricted companies.
3 (3) The retirement system may not acquire securities
4 of restricted companies.
5 (4) The provisions of this subsection (f) do not apply
6 to the retirement system's indirect holdings or private
7 market funds. The Illinois Investment Policy Board shall
8 submit letters to the managers of those investment funds
9 containing restricted companies requesting that they
10 consider removing the companies from the fund or create a
11 similar actively managed fund having indirect holdings
12 devoid of the companies. If the manager creates a similar
13 fund, the retirement system shall replace all applicable
14 investments with investments in the similar fund in an
15 expedited timeframe consistent with prudent investing
16 standards.
17 (f-1) The retirement system shall adhere to the following
18 procedures for restricted companies that are expatriated
19 entities or for-profit companies that contract to shelter
20 migrant children:
21 (1) To the extent that the retirement system believes
22 that shareholder activism would be more impactful than
23 divestment, the retirement system shall have the authority
24 to engage with a restricted company prior to divesting.
25 (2) Subject to any applicable State or Federal laws,
26 methods of shareholder activism utilized by the retirement
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1 system may include, but are not limited to, bringing
2 shareholder resolutions and proxy voting on shareholder
3 resolutions.
4 (3) The retirement system shall report on its
5 shareholder activism and the outcome of such efforts to
6 the Illinois Investment Policy Board by April 1 of each
7 year.
8 (4) If the engagement efforts of the retirement system
9 are unsuccessful, then it shall adhere to the procedures
10 under subsection (f) of this Section.
11 (f-5) Beginning on the effective date of this amendatory
12 Act of the 102nd General Assembly, no retirement system shall
13 invest moneys in Russian or Belarusian sovereign debt, Russian
14 or Belarusian government-backed securities, any investment
15 instrument issued by an entity that is domiciled or has its
16 principal place of business in Russia or Belarus, or any
17 investment instrument issued by a company that is subject to
18 Russian Harmful Foreign Activities Sanctions, and no
19 retirement system shall invest or deposit State moneys in any
20 bank that is domiciled or has its principal place of business
21 in Russia or Belarus. As soon as practicable after the
22 effective date of this amendatory Act of the 102nd General
23 Assembly, each retirement system shall instruct its investment
24 advisors to sell, redeem, divest, or withdraw all direct
25 holdings of Russian or Belarusian sovereign debt and direct
26 holdings of Russian or Belarusian government-backed securities
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1 from the retirement system's assets under management in an
2 orderly and fiduciarily responsible manner.
3 Notwithstanding any provision of this Section to the
4 contrary, a retirement system may cease divestment pursuant to
5 this subsection (f-5) if clear and convincing evidence shows
6 that the value of investments in such Russian or Belarusian
7 sovereign debt and Russian or Belarusian government-backed
8 securities becomes equal to or less than 0.05% of the market
9 value of all assets under management by the retirement system.
10 For any cessation of divestment authorized by this subsection
11 (f-5), the retirement system shall provide a written notice to
12 the Illinois Investment Policy Board in advance of the
13 cessation of divestment, setting forth the reasons and
14 justification, supported by clear and convincing evidence, for
15 its decision to cease divestment under this subsection (f-5).
16 The provisions of this subsection (f-5) do not apply to
17 the retirement system's indirect holdings or private market
18 funds.
19 (g) Upon request, and by April 1 of each year, each
20 retirement system shall provide the Illinois Investment Policy
21 Board with information regarding investments sold, redeemed,
22 divested, or withdrawn in compliance with this Section.
23 (h) Notwithstanding any provision of this Section to the
24 contrary, a retirement system may cease divesting from
25 companies pursuant to subsection (f) if clear and convincing
26 evidence shows that the value of investments in such companies
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1 becomes equal to or less than 0.5% of the market value of all
2 assets under management by the retirement system. For any
3 cessation of divestment authorized by this subsection (h), the
4 retirement system shall provide a written notice to the
5 Illinois Investment Policy Board in advance of the cessation
6 of divestment, setting forth the reasons and justification,
7 supported by clear and convincing evidence, for its decision
8 to cease divestment under subsection (f).
9 (i) The cost associated with the activities of the
10 Illinois Investment Policy Board shall be borne by the boards
11 of each pension fund or investment board created under Article
12 15, 16, or 22A of this Code.
13 (j) With respect to actions taken in compliance with this
14 Section, including all good-faith determinations regarding
15 companies as required by this Section, the retirement system
16 and Illinois Investment Policy Board are exempt from any
17 conflicting statutory or common law obligations, including any
18 fiduciary duties under this Article and any obligations with
19 respect to choice of asset managers, investment funds, or
20 investments for the retirement system's securities portfolios.
21 (k) It is not the intent of the General Assembly in
22 enacting this amendatory Act of the 99th General Assembly to
23 cause divestiture from any company based in the United States
24 of America. The Illinois Investment Policy Board shall
25 consider this intent when developing or reviewing the list of
26 restricted companies.
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1 (l) If any provision of this amendatory Act of the 99th
2 General Assembly or its application to any person or
3 circumstance is held invalid, the invalidity of that provision
4 or application does not affect other provisions or
5 applications of this amendatory Act of the 99th General
6 Assembly that can be given effect without the invalid
7 provision or application.
8 If any provision of Public Act 100-551 or its application
9 to any person or circumstance is held invalid, the invalidity
10 of that provision or application does not affect other
11 provisions or applications of Public Act 100-551 that can be
12 given effect without the invalid provision or application.
13 If any provision of Public Act 102-118 or its application
14 to any person or circumstance is held invalid, the invalidity
15 of that provision or application does not affect other
16 provisions or applications of Public Act 102-118 that can be
17 given effect without the invalid provision or application.
18 If any provision of this amendatory Act of the 102nd
19 General Assembly or its application to any person or
20 circumstance is held invalid, the invalidity of that provision
21 or application does not affect other provisions or
22 applications of this amendatory Act of the 102nd General
23 Assembly that can be given effect without the invalid
24 provision or application.
25 If any provision of this amendatory Act of the 104th
26 General Assembly or its application to any person or
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