96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010
HB3722

 

Introduced 2/25/2009, by Rep. William D. Burns

 

SYNOPSIS AS INTRODUCED:
 
See Index

    Amends the Illinois Governmental Ethics Act. Requires members of the board of any pension fund or retirement system established under the Illinois Pension Code to file a statement of economic interests. Amends the State Officials and Employees Ethics Act. Includes appointed or elected commissioners, trustees, directors, or board members of a board of a State agency, including the boards found in the Illinois Pension Code, in the definition of "employee". Amends the Illinois Pension Code. Makes changes in provisions concerning the definition of "fiduciary", allocation and delegation of fiduciary duties, and prohibited transactions. Adds provisions concerning investment advisers, consultants, and investment services for investment boards, pension funds, and retirement systems other than downstate police and fire pension funds; investment transparency; prohibitions on monetary gain on investments; fraud, prohibitions on gifts; contingent fees; and procurements for pension funds, retirement systems, and investment boards, except downstate police and fire pension funds. Requires the University of Illinois to create the Illinois Fiduciary College for the purpose of education pension fund, retirement system, and investment board members and staffs on ethics.


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CORRECTIONAL BUDGET AND IMPACT NOTE ACT MAY APPLY
FISCAL NOTE ACT MAY APPLY
PENSION IMPACT NOTE ACT MAY APPLY

 

 

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 Governmental Ethics Act is amended
5 by changing Sections 4A-101, 4A-102, 4A-106, and 4A-107 as
6 follows:
 
7     (5 ILCS 420/4A-101)  (from Ch. 127, par. 604A-101)
8     Sec. 4A-101. Persons required to file. The following
9 persons shall file verified written statements of economic
10 interests, as provided in this Article:
11         (a) Members of the General Assembly and candidates for
12     nomination or election to the General Assembly.
13         (b) Persons holding an elected office in the Executive
14     Branch of this State, and candidates for nomination or
15     election to these offices.
16         (c) Members of a Commission or Board created by the
17     Illinois Constitution, and candidates for nomination or
18     election to such Commission or Board.
19         (d) Persons whose appointment to office is subject to
20     confirmation by the Senate.
21         (e) Holders of, and candidates for nomination or
22     election to, the office of judge or associate judge of the
23     Circuit Court and the office of judge of the Appellate or

 

 

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1     Supreme Court.
2         (f) Persons who are employed by any branch, agency,
3     authority or board of the government of this State,
4     including but not limited to, the Illinois State Toll
5     Highway Authority, the Illinois Housing Development
6     Authority, the Illinois Community College Board, and
7     institutions under the jurisdiction of the Board of
8     Trustees of the University of Illinois, Board of Trustees
9     of Southern Illinois University, Board of Trustees of
10     Chicago State University, Board of Trustees of Eastern
11     Illinois University, Board of Trustees of Governor's State
12     University, Board of Trustees of Illinois State
13     University, Board of Trustees of Northeastern Illinois
14     University, Board of Trustees of Northern Illinois
15     University, Board of Trustees of Western Illinois
16     University, or Board of Trustees of the Illinois
17     Mathematics and Science Academy, and are compensated for
18     services as employees and not as independent contractors
19     and who:
20             (1) are, or function as, the head of a department,
21         commission, board, division, bureau, authority or
22         other administrative unit within the government of
23         this State, or who exercise similar authority within
24         the government of this State;
25             (2) have direct supervisory authority over, or
26         direct responsibility for the formulation,

 

 

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1         negotiation, issuance or execution of contracts
2         entered into by the State in the amount of $5,000 or
3         more;
4             (3) have authority for the issuance or
5         promulgation of rules and regulations within areas
6         under the authority of the State;
7             (4) have authority for the approval of
8         professional licenses;
9             (5) have responsibility with respect to the
10         financial inspection of regulated nongovernmental
11         entities;
12             (6) adjudicate, arbitrate, or decide any judicial
13         or administrative proceeding, or review the
14         adjudication, arbitration or decision of any judicial
15         or administrative proceeding within the authority of
16         the State;
17             (7) have supervisory responsibility for 20 or more
18         employees of the State; or
19             (8) negotiate, assign, authorize, or grant naming
20         rights or sponsorship rights regarding any property or
21         asset of the State, whether real, personal, tangible,
22         or intangible.
23         (g) Persons who are elected to office in a unit of
24     local government, and candidates for nomination or
25     election to that office, including regional
26     superintendents of school districts.

 

 

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1         (h) Persons appointed to the governing board of a unit
2     of local government, or of a special district, and persons
3     appointed to a zoning board, or zoning board of appeals, or
4     to a regional, county, or municipal plan commission, or to
5     a board of review of any county, and persons appointed to
6     the Board of the Metropolitan Pier and Exposition Authority
7     and any Trustee appointed under Section 22 of the
8     Metropolitan Pier and Exposition Authority Act, and
9     persons appointed to a board or commission of a unit of
10     local government who have authority to authorize the
11     expenditure of public funds. This subsection does not apply
12     to members of boards or commissions who function in an
13     advisory capacity.
14         (i) Persons who are employed by a unit of local
15     government and are compensated for services as employees
16     and not as independent contractors and who:
17             (1) are, or function as, the head of a department,
18         division, bureau, authority or other administrative
19         unit within the unit of local government, or who
20         exercise similar authority within the unit of local
21         government;
22             (2) have direct supervisory authority over, or
23         direct responsibility for the formulation,
24         negotiation, issuance or execution of contracts
25         entered into by the unit of local government in the
26         amount of $1,000 or greater;

 

 

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1             (3) have authority to approve licenses and permits
2         by the unit of local government; this item does not
3         include employees who function in a ministerial
4         capacity;
5             (4) adjudicate, arbitrate, or decide any judicial
6         or administrative proceeding, or review the
7         adjudication, arbitration or decision of any judicial
8         or administrative proceeding within the authority of
9         the unit of local government;
10             (5) have authority to issue or promulgate rules and
11         regulations within areas under the authority of the
12         unit of local government; or
13             (6) have supervisory responsibility for 20 or more
14         employees of the unit of local government.
15         (j) Persons on the Board of Trustees of the Illinois
16     Mathematics and Science Academy.
17         (k) Persons employed by a school district in positions
18     that require that person to hold an administrative or a
19     chief school business official endorsement.
20         (l) Special government agents. A "special government
21     agent" is a person who is directed, retained, designated,
22     appointed, or employed, with or without compensation, by or
23     on behalf of a statewide executive branch constitutional
24     officer to make an ex parte communication under Section
25     5-50 of the State Officials and Employees Ethics Act or
26     Section 5-165 of the Illinois Administrative Procedure

 

 

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1     Act.
2         (m) Members of the board of commissioners of any flood
3     prevention district.
4         (n) Members of the board of any pension fund or
5     retirement system established under the Illinois Pension
6     Code, if not required to file under any other provision of
7     this Section.
8     This Section shall not be construed to prevent any unit of
9 local government from enacting financial disclosure
10 requirements that mandate more information than required by
11 this Act.
12 (Source: P.A. 95-719, eff. 5-21-08.)
 
13     (5 ILCS 420/4A-102)  (from Ch. 127, par. 604A-102)
14     Sec. 4A-102. The statement of economic interests required
15 by this Article shall include the economic interests of the
16 person making the statement as provided in this Section. The
17 interest (if constructively controlled by the person making the
18 statement) of a spouse or any other party, shall be considered
19 to be the same as the interest of the person making the
20 statement. Campaign receipts shall not be included in this
21 statement.
22     (a) The following interests shall be listed by all persons
23 required to file:
24         (1) The name, address and type of practice of any
25     professional organization or individual professional

 

 

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1     practice in which the person making the statement was an
2     officer, director, associate, partner or proprietor, or
3     served in any advisory capacity, from which income in
4     excess of $1200 was derived during the preceding calendar
5     year;
6         (2) The nature of professional services (other than
7     services rendered to the unit or units of government in
8     relation to which the person is required to file) and the
9     nature of the entity to which they were rendered if fees
10     exceeding $5,000 were received during the preceding
11     calendar year from the entity for professional services
12     rendered by the person making the statement.
13         (3) The identity (including the address or legal
14     description of real estate) of any capital asset from which
15     a capital gain of $5,000 or more was realized in the
16     preceding calendar year.
17         (4) The name of any unit of government which has
18     employed the person making the statement during the
19     preceding calendar year other than the unit or units of
20     government in relation to which the person is required to
21     file.
22         (5) The name of any entity from which a gift or gifts,
23     or honorarium or honoraria, valued singly or in the
24     aggregate in excess of $500, was received during the
25     preceding calendar year.
26     (b) The following interests shall also be listed by persons

 

 

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1 listed in items (a) through (f), and item (l), and item (n) of
2 Section 4A-101:
3         (1) The name and instrument of ownership in any entity
4     doing business in the State of Illinois, in which an
5     ownership interest held by the person at the date of filing
6     is in excess of $5,000 fair market value or from which
7     dividends of in excess of $1,200 were derived during the
8     preceding calendar year. (In the case of real estate,
9     location thereof shall be listed by street address, or if
10     none, then by legal description). No time or demand deposit
11     in a financial institution, nor any debt instrument need be
12     listed;
13         (2) Except for professional service entities, the name
14     of any entity and any position held therein from which
15     income of in excess of $1,200 was derived during the
16     preceding calendar year, if the entity does business in the
17     State of Illinois. No time or demand deposit in a financial
18     institution, nor any debt instrument need be listed.
19         (3) The identity of any compensated lobbyist with whom
20     the person making the statement maintains a close economic
21     association, including the name of the lobbyist and
22     specifying the legislative matter or matters which are the
23     object of the lobbying activity, and describing the general
24     type of economic activity of the client or principal on
25     whose behalf that person is lobbying.
26     (c) The following interests shall also be listed by persons

 

 

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1 listed in items (g), (h), and (i) of Section 4A-101:
2         (1) The name and instrument of ownership in any entity
3     doing business with a unit of local government in relation
4     to which the person is required to file if the ownership
5     interest of the person filing is greater than $5,000 fair
6     market value as of the date of filing or if dividends in
7     excess of $1,200 were received from the entity during the
8     preceding calendar year. (In the case of real estate,
9     location thereof shall be listed by street address, or if
10     none, then by legal description). No time or demand deposit
11     in a financial institution, nor any debt instrument need be
12     listed.
13         (2) Except for professional service entities, the name
14     of any entity and any position held therein from which
15     income in excess of $1,200 was derived during the preceding
16     calendar year if the entity does business with a unit of
17     local government in relation to which the person is
18     required to file. No time or demand deposit in a financial
19     institution, nor any debt instrument need be listed.
20         (3) The name of any entity and the nature of the
21     governmental action requested by any entity which has
22     applied to a unit of local government in relation to which
23     the person must file for any license, franchise or permit
24     for annexation, zoning or rezoning of real estate during
25     the preceding calendar year if the ownership interest of
26     the person filing is in excess of $5,000 fair market value

 

 

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1     at the time of filing or if income or dividends in excess
2     of $1,200 were received by the person filing from the
3     entity during the preceding calendar year.
4 (Source: P.A. 92-101, eff. 1-1-02; 93-617, eff. 12-9-03.)
 
5     (5 ILCS 420/4A-106)  (from Ch. 127, par. 604A-106)
6     Sec. 4A-106. The statements of economic interests required
7 of persons listed in items (a) through (f), item (j), and item
8 (l), and item (n) of Section 4A-101 shall be filed with the
9 Secretary of State. The statements of economic interests
10 required of persons listed in items (g), (h), (i), and (k) of
11 Section 4A-101 shall be filed with the county clerk of the
12 county in which the principal office of the unit of local
13 government with which the person is associated is located. If
14 it is not apparent which county the principal office of a unit
15 of local government is located, the chief administrative
16 officer, or his or her designee, has the authority, for
17 purposes of this Act, to determine the county in which the
18 principal office is located. On or before February 1 annually,
19 (1) the chief administrative officer of any State agency in the
20 executive, legislative, or judicial branch employing persons
21 required to file under item (f) or item (l) of Section 4A-101
22 and the chief administrative officer of a board described in
23 item (n) of Section 4A-101 shall certify to the Secretary of
24 State the names and mailing addresses of those persons, and (2)
25 the chief administrative officer, or his or her designee, of

 

 

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1 each unit of local government with persons described in items
2 (h), (i) and (k) of Section 4A-101 shall certify to the
3 appropriate county clerk a list of names and addresses of
4 persons described in items (h), (i) and (k) of Section 4A-101
5 that are required to file. In preparing the lists, each chief
6 administrative officer, or his or her designee, shall set out
7 the names in alphabetical order.
8     On or before April 1 annually, the Secretary of State shall
9 notify (1) all persons whose names have been certified to him
10 under items (f), and (l), and (n) of Section 4A-101, and (2)
11 all persons described in items (a) through (e) and item (j) of
12 Section 4A-101, other than candidates for office who have filed
13 their statements with their nominating petitions, of the
14 requirements for filing statements of economic interests. A
15 person required to file with the Secretary of State by virtue
16 of more than one item among items (a) through (f) and items
17 (j), and (l), and (n) shall be notified of and is required to
18 file only one statement of economic interests relating to all
19 items under which the person is required to file with the
20 Secretary of State.
21     On or before April 1 annually, the county clerk of each
22 county shall notify all persons whose names have been certified
23 to him under items (g), (h), (i), and (k) of Section 4A-101,
24 other than candidates for office who have filed their
25 statements with their nominating petitions, of the
26 requirements for filing statements of economic interests. A

 

 

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1 person required to file with a county clerk by virtue of more
2 than one item among items (g), (h), (i), and (k) shall be
3 notified of and is required to file only one statement of
4 economic interests relating to all items under which the person
5 is required to file with that county clerk.
6     Except as provided in Section 4A-106.1, the notices
7 provided for in this Section shall be in writing and deposited
8 in the U.S. Mail, properly addressed, first class postage
9 prepaid, on or before the day required by this Section for the
10 sending of the notice. A certificate executed by the Secretary
11 of State or county clerk attesting that he has mailed the
12 notice constitutes prima facie evidence thereof.
13     From the lists certified to him under this Section of
14 persons described in items (g), (h), (i), and (k) of Section
15 4A-101, the clerk of each county shall compile an alphabetical
16 listing of persons required to file statements of economic
17 interests in his office under any of those items. As the
18 statements are filed in his office, the county clerk shall
19 cause the fact of that filing to be indicated on the
20 alphabetical listing of persons who are required to file
21 statements. Within 30 days after the due dates, the county
22 clerk shall mail to the State Board of Elections a true copy of
23 that listing showing those who have filed statements.
24     The county clerk of each county shall note upon the
25 alphabetical listing the names of all persons required to file
26 a statement of economic interests who failed to file a

 

 

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1 statement on or before May 1. It shall be the duty of the
2 several county clerks to give notice as provided in Section
3 4A-105 to any person who has failed to file his or her
4 statement with the clerk on or before May 1.
5     Any person who files or has filed a statement of economic
6 interest under this Act is entitled to receive from the
7 Secretary of State or county clerk, as the case may be, a
8 receipt indicating that the person has filed such a statement,
9 the date of such filing, and the identity of the governmental
10 unit or units in relation to which the filing is required.
11     The Secretary of State may employ such employees and
12 consultants as he considers necessary to carry out his duties
13 hereunder, and may prescribe their duties, fix their
14 compensation, and provide for reimbursement of their expenses.
15     All statements of economic interests filed under this
16 Section shall be available for examination and copying by the
17 public at all reasonable times. Not later than 12 months after
18 the effective date of this amendatory Act of the 93rd General
19 Assembly, beginning with statements filed in calendar year
20 2004, the Secretary of State shall make statements of economic
21 interests filed with the Secretary available for inspection and
22 copying via the Secretary's website.
23 (Source: P.A. 93-617, eff. 12-9-03; 94-603, eff. 8-16-05.)
 
24     (5 ILCS 420/4A-107)  (from Ch. 127, par. 604A-107)
25     Sec. 4A-107. Any person required to file a statement of

 

 

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1 economic interests under this Article who willfully files a
2 false or incomplete statement shall be guilty of a Class A
3 misdemeanor.
4     Failure to file a statement within the time prescribed
5 shall result in ineligibility for, or forfeiture of, office or
6 position of employment, as the case may be; provided, however,
7 that if the notice of failure to file a statement of economic
8 interests provided in Section 4A-105 of this Act is not given
9 by the Secretary of State or the county clerk, as the case may
10 be, no forfeiture shall result if a statement is filed within
11 30 days of actual notice of the failure to file.
12     The Attorney General, with respect to offices or positions
13 described in items (a) through (f) and items (j), and (l), and
14 (n) of Section 4A-101 of this Act, or the State's Attorney of
15 the county of the entity for which the filing of statements of
16 economic interests is required, with respect to offices or
17 positions described in items (g) through (i) and item (k) of
18 Section 4A-101 of this Act, shall bring an action in quo
19 warranto against any person who has failed to file by either
20 May 31 or June 30 of any given year.
21 (Source: P.A. 93-617, eff. 12-9-03.)
 
22     Section 10. The State Officials and Employees Ethics Act is
23 amended by changing Section 1-5 as follows:
 
24     (5 ILCS 430/1-5)

 

 

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1     Sec. 1-5. Definitions. As used in this Act:
2     "Appointee" means a person appointed to a position in or
3 with a State agency, regardless of whether the position is
4 compensated.
5     "Campaign for elective office" means any activity in
6 furtherance of an effort to influence the selection,
7 nomination, election, or appointment of any individual to any
8 federal, State, or local public office or office in a political
9 organization, or the selection, nomination, or election of
10 Presidential or Vice-Presidential electors, but does not
11 include activities (i) relating to the support or opposition of
12 any executive, legislative, or administrative action (as those
13 terms are defined in Section 2 of the Lobbyist Registration
14 Act), (ii) relating to collective bargaining, or (iii) that are
15 otherwise in furtherance of the person's official State duties.
16     "Candidate" means a person who has filed nominating papers
17 or petitions for nomination or election to an elected State
18 office, or who has been appointed to fill a vacancy in
19 nomination, and who remains eligible for placement on the
20 ballot at either a general primary election or general
21 election.
22     "Collective bargaining" has the same meaning as that term
23 is defined in Section 3 of the Illinois Public Labor Relations
24 Act.
25     "Commission" means an ethics commission created by this
26 Act.

 

 

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1     "Compensated time" means any time worked by or credited to
2 a State employee that counts toward any minimum work time
3 requirement imposed as a condition of employment with a State
4 agency, but does not include any designated State holidays or
5 any period when the employee is on a leave of absence.
6     "Compensatory time off" means authorized time off earned by
7 or awarded to a State employee to compensate in whole or in
8 part for time worked in excess of the minimum work time
9 required of that employee as a condition of employment with a
10 State agency.
11     "Contribution" has the same meaning as that term is defined
12 in Section 9-1.4 of the Election Code.
13     "Employee" means (i) any person employed full-time,
14 part-time, or pursuant to a contract and whose employment
15 duties are subject to the direction and control of an employer
16 with regard to the material details of how the work is to be
17 performed or (ii) any appointed or elected commissioner,
18 trustee, director, or board member of a board of a State
19 agency, including the boards found in the Illinois Pension Code
20 or (iii) any other appointee.
21     "Executive branch constitutional officer" means the
22 Governor, Lieutenant Governor, Attorney General, Secretary of
23 State, Comptroller, and Treasurer.
24     "Gift" means any gratuity, discount, entertainment,
25 hospitality, loan, forbearance, or other tangible or
26 intangible item having monetary value including, but not

 

 

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1 limited to, cash, food and drink, and honoraria for speaking
2 engagements related to or attributable to government
3 employment or the official position of an employee, member, or
4 officer.
5     "Governmental entity" means a unit of local government
6 (including a community college district) or a school district
7 but not a State agency.
8     "Leave of absence" means any period during which a State
9 employee does not receive (i) compensation for State
10 employment, (ii) service credit towards State pension
11 benefits, and (iii) health insurance benefits paid for by the
12 State.
13     "Legislative branch constitutional officer" means a member
14 of the General Assembly and the Auditor General.
15     "Legislative leader" means the President and Minority
16 Leader of the Senate and the Speaker and Minority Leader of the
17 House of Representatives.
18     "Member" means a member of the General Assembly.
19     "Officer" means an executive branch constitutional officer
20 or a legislative branch constitutional officer.
21     "Political" means any activity in support of or in
22 connection with any campaign for elective office or any
23 political organization, but does not include activities (i)
24 relating to the support or opposition of any executive,
25 legislative, or administrative action (as those terms are
26 defined in Section 2 of the Lobbyist Registration Act), (ii)

 

 

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1 relating to collective bargaining, or (iii) that are otherwise
2 in furtherance of the person's official State duties or
3 governmental and public service functions.
4     "Political organization" means a party, committee,
5 association, fund, or other organization (whether or not
6 incorporated) that is required to file a statement of
7 organization with the State Board of Elections or a county
8 clerk under Section 9-3 of the Election Code, but only with
9 regard to those activities that require filing with the State
10 Board of Elections or a county clerk.
11     "Prohibited political activity" means:
12         (1) Preparing for, organizing, or participating in any
13     political meeting, political rally, political
14     demonstration, or other political event.
15         (2) Soliciting contributions, including but not
16     limited to the purchase of, selling, distributing, or
17     receiving payment for tickets for any political
18     fundraiser, political meeting, or other political event.
19         (3) Soliciting, planning the solicitation of, or
20     preparing any document or report regarding any thing of
21     value intended as a campaign contribution.
22         (4) Planning, conducting, or participating in a public
23     opinion poll in connection with a campaign for elective
24     office or on behalf of a political organization for
25     political purposes or for or against any referendum
26     question.

 

 

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1         (5) Surveying or gathering information from potential
2     or actual voters in an election to determine probable vote
3     outcome in connection with a campaign for elective office
4     or on behalf of a political organization for political
5     purposes or for or against any referendum question.
6         (6) Assisting at the polls on election day on behalf of
7     any political organization or candidate for elective
8     office or for or against any referendum question.
9         (7) Soliciting votes on behalf of a candidate for
10     elective office or a political organization or for or
11     against any referendum question or helping in an effort to
12     get voters to the polls.
13         (8) Initiating for circulation, preparing,
14     circulating, reviewing, or filing any petition on behalf of
15     a candidate for elective office or for or against any
16     referendum question.
17         (9) Making contributions on behalf of any candidate for
18     elective office in that capacity or in connection with a
19     campaign for elective office.
20         (10) Preparing or reviewing responses to candidate
21     questionnaires in connection with a campaign for elective
22     office or on behalf of a political organization for
23     political purposes.
24         (11) Distributing, preparing for distribution, or
25     mailing campaign literature, campaign signs, or other
26     campaign material on behalf of any candidate for elective

 

 

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1     office or for or against any referendum question.
2         (12) Campaigning for any elective office or for or
3     against any referendum question.
4         (13) Managing or working on a campaign for elective
5     office or for or against any referendum question.
6         (14) Serving as a delegate, alternate, or proxy to a
7     political party convention.
8         (15) Participating in any recount or challenge to the
9     outcome of any election, except to the extent that under
10     subsection (d) of Section 6 of Article IV of the Illinois
11     Constitution each house of the General Assembly shall judge
12     the elections, returns, and qualifications of its members.
13     "Prohibited source" means any person or entity who:
14         (1) is seeking official action (i) by the member or
15     officer or (ii) in the case of an employee, by the employee
16     or by the member, officer, State agency, or other employee
17     directing the employee;
18         (2) does business or seeks to do business (i) with the
19     member or officer or (ii) in the case of an employee, with
20     the employee or with the member, officer, State agency, or
21     other employee directing the employee;
22         (3) conducts activities regulated (i) by the member or
23     officer or (ii) in the case of an employee, by the employee
24     or by the member, officer, State agency, or other employee
25     directing the employee;
26         (4) has interests that may be substantially affected by

 

 

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1     the performance or non-performance of the official duties
2     of the member, officer, or employee; or
3         (5) is registered or required to be registered with the
4     Secretary of State under the Lobbyist Registration Act,
5     except that an entity not otherwise a prohibited source
6     does not become a prohibited source merely because a
7     registered lobbyist is one of its members or serves on its
8     board of directors.
9     "State agency" includes all officers, boards, commissions
10 and agencies created by the Constitution, whether in the
11 executive or legislative branch; all officers, departments,
12 boards, commissions, agencies, institutions, authorities,
13 public institutions of higher learning as defined in Section 2
14 of the Higher Education Cooperation Act (except community
15 colleges), and bodies politic and corporate of the State; and
16 administrative units or corporate outgrowths of the State
17 government which are created by or pursuant to statute, other
18 than units of local government (including community college
19 districts) and their officers, school districts, and boards of
20 election commissioners; and all administrative units and
21 corporate outgrowths of the above and as may be created by
22 executive order of the Governor. "State agency" includes the
23 General Assembly, the Senate, the House of Representatives, the
24 President and Minority Leader of the Senate, the Speaker and
25 Minority Leader of the House of Representatives, the Senate
26 Operations Commission, and the legislative support services

 

 

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1 agencies. "State agency" includes the Office of the Auditor
2 General. "State agency" does not include the judicial branch.
3     "State employee" means any employee of a State agency.
4     "Ultimate jurisdictional authority" means the following:
5         (1) For members, legislative partisan staff, and
6     legislative secretaries, the appropriate legislative
7     leader: President of the Senate, Minority Leader of the
8     Senate, Speaker of the House of Representatives, or
9     Minority Leader of the House of Representatives.
10         (2) For State employees who are professional staff or
11     employees of the Senate and not covered under item (1), the
12     Senate Operations Commission.
13         (3) For State employees who are professional staff or
14     employees of the House of Representatives and not covered
15     under item (1), the Speaker of the House of
16     Representatives.
17         (4) For State employees who are employees of the
18     legislative support services agencies, the Joint Committee
19     on Legislative Support Services.
20         (5) For State employees of the Auditor General, the
21     Auditor General.
22         (6) For State employees of public institutions of
23     higher learning as defined in Section 2 of the Higher
24     Education Cooperation Act (except community colleges), the
25     board of trustees of the appropriate public institution of
26     higher learning.

 

 

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1         (7) For State employees of an executive branch
2     constitutional officer other than those described in
3     paragraph (6), the appropriate executive branch
4     constitutional officer.
5         (8) For State employees not under the jurisdiction of
6     paragraph (1), (2), (3), (4), (5), (6), or (7), the
7     Governor.
8 (Source: P.A. 95-880, eff. 8-19-08.)
 
9     Section 15. The Illinois Pension Code is amended by
10 changing Sections 1-101.2, 1-109.1, and 1-110 and by adding
11 Sections 1-113.14, 1-113.15, 1-113.16, 1-130, 1-135, 1-140,
12 1-145, and 1-150 as follows:
 
13     (40 ILCS 5/1-101.2)
14     Sec. 1-101.2. Fiduciary. A person is a "fiduciary" with
15 respect to a pension fund or retirement system established
16 under this Code to the extent that the person:
17         (1) exercises any discretionary authority or
18     discretionary control respecting management of the pension
19     fund or retirement system, or exercises any authority or
20     control respecting management or disposition of its
21     assets;
22         (2) renders investment advice or renders advice on the
23     selection of other fiduciaries for a fee or other
24     compensation, direct or indirect, with respect to any

 

 

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1     moneys or other property of the pension fund or retirement
2     system, or has any authority or responsibility to do so; or
3         (3) has any discretionary authority or discretionary
4     responsibility in the administration of the pension fund or
5     retirement system.
6 (Source: P.A. 90-507, eff. 8-22-97.)
 
7     (40 ILCS 5/1-109.1)  (from Ch. 108 1/2, par. 1-109.1)
8     Sec. 1-109.1. Allocation and Delegation of Fiduciary
9 Duties.
10     (1) Subject to the provisions of Section 22A-113 of this
11 Code and subsections (2) and (3) of this Section, the board of
12 trustees of a retirement system or pension fund established
13 under this Code may:
14         (a) Appoint one or more investment managers as
15     fiduciaries to manage (including the power to acquire and
16     dispose of) any assets of the retirement system or pension
17     fund; and
18         (b) Allocate duties among themselves and designate
19     others as fiduciaries to carry out specific fiduciary
20     activities other than the management of the assets of the
21     retirement system or pension fund.
22     (2) The board of trustees of a pension fund established
23 under Article 5, 6, 8, 9, 10, 11, 12 or 17 of this Code may not
24 transfer its investment authority, nor transfer the assets of
25 the fund to any other person or entity for the purpose of

 

 

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1 consolidating or merging its assets and management with any
2 other pension fund or public investment authority, unless the
3 board resolution authorizing such transfer is submitted for
4 approval to the contributors and pensioners of the fund at
5 elections held not less than 30 days after the adoption of such
6 resolution by the board, and such resolution is approved by a
7 majority of the votes cast on the question in both the
8 contributors election and the pensioners election. The
9 election procedures and qualifications governing the election
10 of trustees shall govern the submission of resolutions for
11 approval under this paragraph, insofar as they may be made
12 applicable.
13     (3) Pursuant to subsections (h) and (i) of Section 6 of
14 Article VII of the Illinois Constitution, the investment
15 authority of boards of trustees of retirement systems and
16 pension funds established under this Code is declared to be a
17 subject of exclusive State jurisdiction, and the concurrent
18 exercise by a home rule unit of any power affecting such
19 investment authority is hereby specifically denied and
20 preempted.
21     (4) For the purposes of this Code, "emerging investment
22 manager" means a qualified investment adviser that manages an
23 investment portfolio of at least $10,000,000 but less than
24 $2,000,000,000 and is a "minority owned business", or "female
25 owned business" or "business owned by a person with a
26 disability" as those terms are defined in the Business

 

 

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1 Enterprise for Minorities, Females, and Persons with
2 Disabilities Act.
3     For the purposes of this Code, "minority broker-dealer"
4 means a qualified broker-dealer who meets the definition of
5 "minority owned business", "female owned business", or
6 "business owned by a person with a disability", as those terms
7 are defined in the Business Enterprise for Minorities, Females,
8 and Persons with Disabilities Act.
9     It is hereby declared to be the public policy of the State
10 of Illinois to encourage the trustees of public employee
11 retirement systems, pension funds, and investment boards
12 (hereinafter referred to as "system") to use emerging
13 investment managers in managing their system's assets to the
14 greatest extent feasible within the bounds of financial and
15 fiduciary prudence, and to take affirmative steps to remove any
16 barriers to the full participation of emerging investment
17 managers in investment opportunities afforded by those
18 retirement systems.
19     Each system subject to this Code shall adopt policies that
20 identify the system's plan and implementation procedures for
21 increasing the utilization of emerging investment managers and
22 minority broker-dealers.
23     Each retirement system subject to this Code shall prepare a
24 report to be submitted to the Governor and the General Assembly
25 by September 1 of each year. The report shall identify the
26 emerging investment managers and minority broker-dealers used

 

 

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1 by the system, the percentage of the system's assets under the
2 investment control of emerging investment managers, the
3 percentage of total commissions paid by the system's investment
4 managers to minority broker-dealers, the policies adopted by
5 the system to increase the utilization of emerging investment
6 managers and minority broker-dealers, and the actions it has
7 undertaken to increase the use of emerging investment managers
8 and minority broker-dealers, including encouraging other
9 investment managers to use emerging investment managers as
10 subcontractors when the opportunity arises and to use minority
11 broker-dealers.
12     If in any case an emerging investment manager meets the
13 criteria established by a board for a specific search and meets
14 the criteria established by a consultant for that search, then
15 that emerging investment manager shall receive an invitation by
16 the board of trustees, or an investment committee of the board
17 of trustees, to present their firm for final consideration of a
18 contract. In the case where multiple emerging investment
19 managers meet the criteria of this Section, the staff may
20 choose the most qualified firm or firms to present to the
21 board. In any case where a firm meets the criteria of this
22 Section, but does not present in front of the board, the staff
23 must expressly notify that firm of all future searches with the
24 same criteria as the initial search for which the firm was
25 qualified.
26     The use of an emerging investment manager does not

 

 

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1 constitute a transfer of investment authority for the purposes
2 of subsection (2) of this Section.
3 (Source: P.A. 94-471, eff. 8-4-05.)
 
4     (40 ILCS 5/1-110)  (from Ch. 108 1/2, par. 1-110)
5     Sec. 1-110. Prohibited Transactions.
6     (a) A fiduciary with respect to a retirement system or
7 pension fund shall not cause the retirement system or pension
8 fund to engage in a transaction if he or she knows or should
9 know that such transaction constitutes a direct or indirect:
10         (1) Sale or exchange, or leasing of any property from
11     the retirement system or pension fund to a party in
12     interest for less than adequate consideration, or from a
13     party in interest to a retirement system or pension fund
14     for more than adequate consideration.
15         (2) Lending of money or other extension of credit from
16     the retirement system or pension fund to a party in
17     interest without the receipt of adequate security and a
18     reasonable rate of interest, or from a party in interest to
19     a retirement system or pension fund with the provision of
20     excessive security or an unreasonably high rate of
21     interest.
22         (3) Furnishing of goods, services or facilities from
23     the retirement system or pension fund to a party in
24     interest for less than adequate consideration, or from a
25     party in interest to a retirement system or pension fund

 

 

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1     for more than adequate consideration.
2         (4) Transfer to, or use by or for the benefit of, a
3     party in interest of any assets of a retirement system or
4     pension fund for less than adequate consideration.
5     (b) A fiduciary with respect to a retirement system or
6 pension fund established under this Code shall not:
7         (1) Deal with the assets of the retirement system or
8     pension fund in his own interest or for his own account;
9         (2) In his individual or any other capacity act in any
10     transaction involving the retirement system or pension
11     fund on behalf of a party whose interests are adverse to
12     the interests of the retirement system or pension fund or
13     the interests of its participants or beneficiaries; or
14         (3) Receive any consideration for his own personal
15     account from any party dealing with the retirement system
16     or pension fund in connection with a transaction involving
17     the assets of the retirement system or pension fund.
18     (c) Nothing in this Section shall be construed to prohibit
19 any trustee from:
20         (1) Receiving any benefit to which he may be entitled
21     as a participant or beneficiary in the retirement system or
22     pension fund.
23         (2) Receiving any reimbursement of expenses properly
24     and actually incurred in the performance of his duties with
25     the retirement system or pension fund.
26         (3) Serving as a trustee in addition to being an

 

 

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1     officer, employee, agent or other representative of a party
2     in interest.
3     (d) A fiduciary of a pension fund established under Article
4 3 or 4 shall not knowingly cause or advise the pension fund to
5 engage in an investment transaction when the fiduciary (i) has
6 any direct interest in the income, gains, or profits of the
7 investment advisor through which the investment transaction is
8 made or (ii) has a business relationship with that investment
9 advisor that would result in a pecuniary benefit to the
10 fiduciary as a result of the investment transaction.
11     Violation of this subsection (d) is a Class 4 felony.
12     (e) A board member, employee, or consultant with respect to
13 a retirement system or pension fund shall not knowingly cause
14 or advise the retirement system or pension fund to engage in an
15 investment transaction when the board member, employee,
16 consultant, or their spouse (i) has any direct interest in the
17 income, gains, or profits of the investment advisor through
18 which the investment transaction is made or (ii) has a
19 relationship with that investment advisor that would result in
20 a pecuniary benefit to the board member, employee, or
21 consultant or spouse of such board member, employee, or
22 consultant as a result of the investment transaction. For
23 purposes of this subsection (e), a consultant includes an
24 employee or agent of a consulting firm who has greater than
25 7.5% ownership of the consulting company.
26     Violation of this subsection (e) is a Class 3 felony.

 

 

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1 (Source: P.A. 95-950, eff. 8-29-08.)
 
2     (40 ILCS 5/1-113.14 new)
3     Sec. 1-113.14. Investment advisers, consultants, and
4 investment services for investment boards, pension funds, and
5 retirement systems other than pension funds created under
6 Articles 3 and 4.
7     (a) The selection and appointment of a consultant and the
8 contracting for investment consulting services by a consultant
9 constitute procurements that must be made and awarded in a
10 manner consistent with Section 1-150 of this Code. All offers
11 from responsive offerors shall be accompanied by disclosure of
12 the names and addresses of the following:
13         (1) The offeror.
14         (2) Any entity that is a parent of, or owns a
15     controlling interest in, the offeror.
16         (3) Any entity that is a subsidiary of, or in which a
17     controlling interest is owned by, the offeror.
18         (4) The offeror's key persons. "Key persons" means any
19     persons who (i) have an ownership or distributive income
20     share in the offeror that is in excess of 5%, or an amount
21     greater than 60% of the annual salary of the Governor, or
22     (ii) serve as executive officers of the offeror.
23     A person, other than a trustee or an employee of a pension
24 fund or retirement system, may not act as a consultant under
25 this Section unless that person is at least one of the

 

 

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1 following: (i) registered as an investment adviser under the
2 federal Investment Advisers Act of 1940 (15 U.S.C. 80b-1, et
3 seq.); (ii) registered as an investment adviser under the
4 Illinois Securities Law of 1953; (iii) a bank, as defined in
5 the Investment Advisers Act of 1940; or (iv) an insurance
6 company authorized to transact business in this State.
7     (b) All investment advice and services provided by an
8 investment adviser or a consultant appointed under this Section
9 shall be (i) rendered pursuant to a written contract between
10 the investment adviser or consultant and the board and (ii) in
11 accordance with the board's investment policy.
12     The contract shall include all of the following:
13         (1) acknowledgement in writing by the investment
14     adviser or consultant that he or she is a fiduciary with
15     respect to the pension fund or retirement system;
16         (2) the board's investment policy;
17         (3) full disclosure of direct and indirect fees,
18     commissions, penalties, and any other compensation that
19     may be received by the investment adviser or consultant,
20     including reimbursement for expenses; and
21         (4) a requirement that the investment adviser or
22     consultant submit periodic written reports, on at least a
23     quarterly basis, for the board's review at its regularly
24     scheduled meetings. All returns on investment shall be
25     reported as net returns after payment of all fees,
26     commissions, and any other compensation.

 

 

HB3722 - 33 - LRB096 11194 AMC 21587 b

1     (c) Each contract described in subsection (b) shall also
2 include (i) full disclosure of direct and indirect fees,
3 commissions, penalties, and other compensation, including
4 reimbursement for expenses, that may be paid by or on behalf of
5 the consultant in connection with the provision of services to
6 the pension fund or retirement system and (ii) a requirement
7 that the consultant update the disclosure promptly after a
8 modification of those payments or an additional payment.
9     Within 30 days after the effective date of this amendatory
10 Act of the 96th General Assembly, each consultant currently
11 providing services or subject to an existing contract for the
12 provision of services must disclose to the board of trustees
13 all direct and indirect fees, commissions, penalties, and other
14 compensation paid by or on behalf of the consultant in
15 connection with the provision of those services and shall
16 update that disclosure promptly after a modification of those
17 payments or an additional payment. A person required to make a
18 disclosure under subsection (d) is also required to disclose
19 direct and indirect fees, commissions, penalties, or other
20 compensation that shall or may be paid by or on behalf of the
21 person in connection with the rendering of those services. The
22 person shall update the disclosure promptly after a
23 modification of those payments or an additional payment. The
24 disclosures required by this subsection (b) shall be in writing
25 and shall include the date and amount of each payment and the
26 name and address of each recipient of a payment.

 

 

HB3722 - 34 - LRB096 11194 AMC 21587 b

1     (d) Investment services provided by a person other than an
2 investment adviser appointed under this Section, including,
3 but not limited to, services provided by the kinds of persons
4 listed in items (1) through (4) of subsection (a), shall be
5 rendered only after full written disclosure of direct and
6 indirect fees, commissions, penalties, and any other
7 compensation that shall or may be received by the person
8 rendering those services.
9     (e) Notwithstanding any other provision of law, a board of
10 trustees of a pension fund or retirement system of this Code
11 shall adopt a policy that sets forth goals of utilization of
12 businesses owned by minorities, females, and persons with
13 Disabilities. When developing these goals, the system shall
14 look at the Business Enterprise for Minorities, Females, and
15 Persons with Disabilities Act, the preceding 5 fiscal years
16 utilization numbers, and the existence of qualified firms with
17 a willingness to do business with the system. The board of
18 trustees shall post upon its website the percentage of its
19 contracts awarded under this Section currently and during the
20 preceding 5 fiscal years that were awarded to minority owned
21 businesses, female owned businesses, and businesses owned by a
22 person with a disability.
23     (f) Notwithstanding the foregoing, the retirement system
24 or pension fund established under this Code shall not have a
25 goal that is less than 12% of the total dollar amount of all
26 contracts let to "minority owned businesses", "female owned

 

 

HB3722 - 35 - LRB096 11194 AMC 21587 b

1 businesses", and "businesses owned by a person with a
2 disability", as those terms are defined in the Business
3 Enterprise for Minorities, Females, and Persons with
4 Disabilities Act.
 
5     (40 ILCS 5/1-113.15 new)
6     Sec. 1-113.15. Illinois Fiduciary College. The University
7 of Illinois shall create and maintain a fiduciary college. This
8 college shall offer continuing education at any of the
9 University of Illinois campuses or other locations established
10 by the University for the sole purpose of educating pension
11 fund, retirement system, and investment board members and
12 staffs on ethics, fiduciary duty, investment issues, and any
13 other curriculum that the University establishes as being
14 important to the administration of a pension system. It will be
15 mandatory that all board members of any fund created under this
16 Code, except those created under Articles 3 and 4, attend
17 training of at least 8 hours per year at the Illinois Fiduciary
18 College. All expenses shall be charged by the University to the
19 retirement system as a percentage cost based on the total asset
20 level possessed by the fund. The classes may be open to others
21 at the University's discretion and shall be charged at an
22 hourly rate equal to what the University would otherwise charge
23 students for similar class work.
24     Pension funds established under Article 3 and 4 of this
25 Code may opt to participate in these classes, and in doing so,

 

 

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1 board members shall fulfill any requirements for training
2 otherwise required by this Code. In establishing the costs paid
3 by these funds, the University shall charge the boards a rate
4 based on their size, but may waive this charge at the
5 University's discretion.
 
6     (40 ILCS 5/1-113.16 new)
7     Sec. 1-113.16. Investment transparency.
8     (a) The purpose of this Section is to provide for
9 transparency in the investment of public funds by requiring the
10 reporting of full and complete information regarding the
11 investment moneys by pension funds, retirement systems, and
12 investment boards.
13     (b) The pension fund, retirement system, or investment
14 board shall make available in a clear and conspicuous manner on
15 its official website, and update at least monthly, all of the
16 following information concerning the investment of public
17 funds:
18         (1)The total amount of funds held by the pension fund,
19     retirement system, or investment board.
20         (2) The asset allocation for the investments made by
21     the pension fund, retirement system, or investment board.
22         (3) Current and historic return information.
23         (4) A detailed listing of the investment managers for
24     all asset classes and the performance of each.
25         (5) Performance of investments compared against

 

 

HB3722 - 37 - LRB096 11194 AMC 21587 b

1     established benchmarks.
2     (c) Nothing in this Section requires the pension fund,
3 retirement system, or investment board to make information
4 available on the Internet that is exempt from inspection and
5 copying under the Freedom of Information Act, or information
6 which has not been audited and approved by its board.
 
7     (40 ILCS 5/1-130 new)
8     Sec. 1-130. No monetary gain on investments. No member or
9 employee of the board of trustees of any retirement system or
10 pension fund created under this Code or the Illinois State
11 Board of Investment nor any spouse of such member or employee
12 shall have any direct interest in the income, gains, or profits
13 of any investments made in behalf of a retirement system or
14 pension fund created under this Code, nor receive any pay or
15 emolument for services in connection with any investment. No
16 member or employee of the board of trustees of any retirement
17 system or pension fund created under this Code or the Illinois
18 State Board of Investment shall become an endorser or surety,
19 or in any manner an obligor for money loaned or borrowed from
20 any retirement system or pension fund created under this Code
21 or the Illinois State Board of Investment. For the purposes of
22 this Section, an annuity otherwise provided in accordance with
23 this Code is not considered monetary gain on investments.
24     Violation of this Section is a Class 3 felony.
 

 

 

HB3722 - 38 - LRB096 11194 AMC 21587 b

1     (40 ILCS 5/1-135 new)
2     Sec. 1-135. Fraud. Any person who knowingly makes any false
3 statement or falsifies or permits to be falsified any record of
4 a retirement system or pension fund created under this Code or
5 the Illinois State Board of Investment in an attempt to defraud
6 the retirement system or pension fund created under this Code
7 or the Illinois State Board of Investment is guilty of a Class
8 3 felony.
 
9     (40 ILCS 5/1-140 new)
10     Sec. 1-140. Prohibition on gifts.
11     (a) For the purposes of this Section:
12     "Board" means the board of trustees of a pension fund or
13 retirement system created under this Code or the Illinois State
14 Board of Investment.
15     "Gift" means a gift as defined in Section 1-5 of the State
16 Officials and Employees Ethics Act; however, a gift shall not
17 include those items excluded as a gift by the State Officials
18 and Employees Ethics Act.
19     "Prohibited source" means a person or entity who: (i) is
20 seeking official action (A) by the board, (B) by a board
21 member, or (C) in the case of a board employee, by the
22 employee, the board, a board member, or another employee
23 directing the employee; (ii) does business or seeks to do
24 business (A) with the board, (B) with a board member, or (C) in
25 the case of a board employee, with the employee, the board, a

 

 

HB3722 - 39 - LRB096 11194 AMC 21587 b

1 board member, or another employee directing the employee; (iii)
2 has interests that may be substantially affected by the
3 performance or non-performance of the official duties of the
4 board member or employee; or (iv) is registered or required to
5 be registered with the Secretary of State under the Lobbyist
6 Registration Act, except that an entity not otherwise a
7 prohibited source does not become a prohibited source merely
8 because a registered lobbyist is one of its members or serves
9 on its board of directors.
10     (b) No board member or employee shall solicit or accept any
11 gift from a prohibited source or from an officer, agent, or
12 employee of a prohibited source. No prohibited source or
13 officer, agent, or employee of a prohibited source shall offer
14 to a board member or employee any gift.
15     (c) Violation of this Section is a Class A misdemeanor.
 
16     (40 ILCS 5/1-145 new)
17     Sec. 1-145. Contingent fees. No person shall retain a
18 solicitor or placement agent to attempt to influence the
19 outcome of an investment decision of or the procurement of
20 investment advice or services by a board of a pension fund or
21 retirement system created under this Code, or the Board or
22 Oversight Board of the Illinois Public Employees Retirement
23 System for compensation contingent in whole or in part upon the
24 decision or procurement, unless (i) such solicitor is a person
25 enumerated in one of clauses (1) through (5) of Section 1-101.4

 

 

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1 and is in compliance with Rule 206(4)-3 of the Investment
2 Advisers Act of 1940 or (ii) such placement agent is registered
3 as a broker or dealer pursuant to the federal Securities and
4 Exchange Act of 1934, as amended, or the Illinois Securities
5 Law of 1953.
6     Any person who violates this Section is guilty of a
7 business offense and shall be fined not more than $10,000.
 
8     (40 ILCS 5/1-150 new)
9     Sec. 1-150. Procurement for pension funds, retirement
10 systems, and investment boards, except those created under
11 Articles 3 and 4.
12     (a) For the purposes of this Section:
13     "Affiliated entity" means (i) any subsidiary of the bidding
14 or contracting entity, (ii) any member of the same unitary
15 business group, and (iii) any political committee for which the
16 bidding or contracting entity is the sponsoring entity.
17     "Affiliated person" means (i) any person with any ownership
18 interest or distributive share of the bidding or contracting
19 entity in excess of 5%, (ii) any executive employee of the
20 bidding or contracting entity, and (iii) the spouse and minor
21 children of any such person.
22     "Consultant" means any person or entity that is employed to
23 make recommendations to the pension fund, retirement system, or
24 board of investment in choosing an investment manager or
25 managers, but does not include an investment fund of funds

 

 

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1 where the system has no direct contractual relationship with
2 the investment manager.
3     (b) All investment consulting services for a pension fund,
4 retirement system, or board of investment established under
5 this Code, other than a pension fund established under Article
6 3 or 4, shall be procured in accordance with the provisions of
7 this Section. Each pension fund, retirement system, or board of
8 investment has the authority to select, according to the
9 provisions of this Section, its own investment consulting
10 services.
11     (c) The pension fund, retirement system, or board of
12 investment may develop appropriate and reasonable
13 prequalification standards and categories of investment
14 consulting services. If adopted, the prequalifications and
15 categorizations shall be submitted to the Procurement Policy
16 Board and published for public comment prior to their
17 submission to the Joint Committee on Administrative Rules for
18 approval.
19     The pension fund, retirement system, or board of investment
20 shall also assemble and maintain a comprehensive list of
21 prequalified and categorized businesses and persons.
22 Prequalification shall not be used to bar or prevent any
23 qualified business or person for bidding or responding to
24 invitations for bid or proposal.
25     (d) The retirement system, pension fund, or board of
26 investment shall develop, cause to be printed, and distribute

 

 

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1 uniform documents for the solicitation, review, and acceptance
2 of all investment consulting services. All retirement systems,
3 pension funds, or boards of investment shall use the
4 appropriate uniform procedures and forms specified in this
5 subsection (c) for all investment consulting services. These
6 forms shall include in detail, in writing, at least all of the
7 following:
8         (1) A description of the goal to be achieved.
9         (2) The services to be performed.
10         (3) The need for the service.
11         (4) The qualifications that are necessary.
12         (5) A plan for post performance review.
13     (e) The pension fund, retirement system, or board of
14 investment shall develop, cause to be printed, and distribute
15 uniform documents for the contracting of investment consulting
16 services. All pension funds, retirement systems, and boards of
17 investment shall use the appropriate uniform contracts and
18 forms in contracting for all professional and artistic
19 services. These contracts and forms shall include in detail, in
20 writing, at least all of the following:
21         (1) The details listed in subsection (c) of this
22     Section relating to uniformity in procurement.
23         (2) The duration of the contract, with a schedule of
24     delivery, when applicable.
25         (3) The method for charging and measuring cost (hourly,
26     per day, etc.).

 

 

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1         (4) The rate of remuneration.
2         (5) The maximum price.
3     (f) All contracts for investment consulting services,
4 except as provided in this Section, shall be awarded using the
5 competitive request for proposal process outlined in this
6 Section. For each contract offered, the retirement system,
7 pension fund, or board of investment shall use appropriate
8 solicitation forms approved by its respective board of
9 trustees. Approved solicitation forms shall be published on the
10 website of the pension fund, retirement system, or board of
11 investment. Notice of the offer or request for proposal shall
12 appear at least 14 days before the response to the offer is
13 due. All interested respondents shall return their responses to
14 the pension fund, retirement system or board of investment.
15 After evaluation, ranking, and selection, the pension fund,
16 retirement system, or board of investment shall publish the
17 names of the responsible procurement decision-maker, the
18 successful respondent, a contract reference, and value of the
19 let contract on its website. The pension fund, retirement
20 system, and board of investment may each refine, but not
21 contradict, this Section by promulgating rules for submission
22 to the Joint Committee on Administrative Rules.
23     (g) Exceptions to this Section are allowed for sole source
24 procurements, emergency procurements, and at the discretion of
25 the pension fund, retirement system or board of investment, for
26 professional and artistic contracts that are nonrenewable, one

 

 

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1 year or less in duration, and have a value of less than
2 $20,000. All exceptions granted under this Section must still
3 be published on the system's, fund's or board's website, shall
4 name the authorizing person, and shall include a brief
5 explanation of the reason for the exception.
6     (h) Any contract granted under this Section shall state
7 whether the services of a subcontractor will be used. The
8 contract shall include the names and addresses of all
9 subcontractors and the expected amount of money each will
10 receive under the contract. If at any time during the term of a
11 contract, a contractor adds or changes any subcontractors, he
12 or she shall promptly notify, in writing, the pension fund,
13 retirement system or board of investment of the names and
14 addresses and the expected amount of money each new or replaced
15 subcontractor will receive.
16     (i) A person, other than a trustee or an employee of a
17 pension fund, retirement system, or investment board, may not
18 act as a consultant under this Section unless that person is at
19 least one of the following: (i) registered as an investment
20 adviser under the federal Investment Advisers Act of 1940 (15
21 U.S.C. 80b-1, et seq.); (ii) registered as an investment
22 adviser under the Illinois Securities Law of 1953; (iii) a
23 bank, as defined in the Investment Advisers Act of 1940; or
24 (iv) an insurance company authorized to transact business in
25 this State.
26     (j) All investment advice and services provided by a

 

 

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1 consultant appointed under this Section shall be (i) rendered
2 pursuant to a written contract between the consultant and the
3 pension fund, retirement system, or investment board, awarded
4 as provided in subsection (f), and (ii) in accordance with the
5 pension fund's, retirement system's, or investment board's
6 investment policy. The contract shall include all of the
7 following:
8         (1) Acknowledgement in writing by the consultant that
9     the consultant is a fiduciary with respect to the pension
10     fund, retirement system, or investment board.
11         (2) The pension fund's, retirement system's, or
12     investment board's investment policy.
13         (3) Full disclosure of direct and indirect fees,
14     commissions, penalties, and any other compensation that
15     may be received by the consultant, including reimbursement
16     for expenses.
17         (4) A requirement that the consultant submit periodic
18     written reports, on at least a quarterly basis, for the
19     pension fund's, retirement system's, or investment board's
20     review at its regularly scheduled meetings.
21     (f) Each contract described in subsection (e) shall also
22 include (i) full disclosure of direct and indirect fees,
23 commissions, penalties, and other compensation, including
24 reimbursement for expenses, that have been or may be paid by or
25 on behalf of the consultant in connection with the provision of
26 services to the pension fund or retirement system, and (ii) a

 

 

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1 requirement that the consultant update the disclosure promptly
2 after a modification of those payments or an additional
3 payment. The disclosures required by this subsection (f) shall
4 be in writing and shall include the date and amount of each
5 payment and the name and address of each recipient of a
6 payment.
 
7     Section 97. Severability. The provisions of this Act are
8 severable under Section 1.31 of the Statute on Statutes.

 

 

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1 INDEX
2 Statutes amended in order of appearance
3     5 ILCS 420/4A-101 from Ch. 127, par. 604A-101
4     5 ILCS 420/4A-102 from Ch. 127, par. 604A-102
5     5 ILCS 420/4A-106 from Ch. 127, par. 604A-106
6     5 ILCS 420/4A-107 from Ch. 127, par. 604A-107
7     5 ILCS 430/1-5
8     40 ILCS 5/1-101.2
9     40 ILCS 5/1-109.1 from Ch. 108 1/2, par. 1-109.1
10     40 ILCS 5/1-110 from Ch. 108 1/2, par. 1-110
11     40 ILCS 5/1-113.14 new
12     40 ILCS 5/1-113.15 new
13     40 ILCS 5/1-113.16 new
14     40 ILCS 5/1-130 new
15     40 ILCS 5/1-135 new
16     40 ILCS 5/1-140 new
17     40 ILCS 5/1-145 new
18     40 ILCS 5/1-150 new