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1 | AN ACT concerning public employee benefits.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 5. The Illinois Pension Code is amended by adding | ||||||||||||||||||||||||
5 | Section 1-110.16 as follows: | ||||||||||||||||||||||||
6 | (40 ILCS 5/1-110.16 new) | ||||||||||||||||||||||||
7 | Sec. 1-110.16. Transactions prohibited by retirement | ||||||||||||||||||||||||
8 | systems; manufacturers of firearms and ammunition. | ||||||||||||||||||||||||
9 | (a) As used in this Section: | ||||||||||||||||||||||||
10 | "Company" means any sole proprietorship,
organization, | ||||||||||||||||||||||||
11 | association, corporation, partnership, joint
venture, limited | ||||||||||||||||||||||||
12 | partnership, limited liability partnership,
limited liability | ||||||||||||||||||||||||
13 | company, or other entity or business
association, including all | ||||||||||||||||||||||||
14 | wholly owned subsidiaries,
majority-owned subsidiaries, parent | ||||||||||||||||||||||||
15 | companies, or affiliates
of those entities or business | ||||||||||||||||||||||||
16 | associations, that exists for
the purpose of making profit. | ||||||||||||||||||||||||
17 | "Direct holdings" in a company means all
securities of that | ||||||||||||||||||||||||
18 | company that are held directly by the
retirement system or in | ||||||||||||||||||||||||
19 | an account or fund in which the retirement system
owns all | ||||||||||||||||||||||||
20 | shares or interests. | ||||||||||||||||||||||||
21 | "Firearm manufacturing company" means a company that is | ||||||||||||||||||||||||
22 | licensed pursuant to 27 C.F.R. 478.41 as a manufacturer of | ||||||||||||||||||||||||
23 | destructive devices, ammunition for destructive devices, armor |
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1 | piercing ammunition, firearms other than destructive devices, | ||||||
2 | or ammunition for firearms other than destructive devices or | ||||||
3 | armor piercing ammunition but does not include either a company | ||||||
4 | that manufactures only ceremonial weapons or a company that | ||||||
5 | manufactures only unassembled component parts for any of the | ||||||
6 | following: destructive devices, ammunition for destructive | ||||||
7 | devices, armor piercing ammunition, firearms other than | ||||||
8 | destructive devices, or ammunition for firearms other than | ||||||
9 | destructive devices or armor piercing ammunition. | ||||||
10 | "Indirect holdings" in a company means all
securities of | ||||||
11 | that company that are held in an account or
fund, such as a | ||||||
12 | mutual fund, managed by one or more persons
not employed by the | ||||||
13 | retirement system, in which the retirement system owns
shares | ||||||
14 | or interests together with other investors not subject
to the | ||||||
15 | provisions of this Section. | ||||||
16 | "Private market fund" means any private equity fund, | ||||||
17 | private equity fund of funds, venture capital fund, hedge fund, | ||||||
18 | hedge fund of funds, real estate fund, or other investment | ||||||
19 | vehicle that is not publicly traded.
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20 | "Retirement system" means any pension fund or retirement | ||||||
21 | system established under this Code. | ||||||
22 | (b) Within 90 days after the effective date of this
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23 | Section, each retirement system shall make its best efforts to | ||||||
24 | identify all firearm manufacturing companies in which the | ||||||
25 | retirement system has direct or indirect holdings. | ||||||
26 | These efforts shall include the following, as appropriate |
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1 | in the retirement system's judgment: | ||||||
2 | (1) reviewing and relying on publicly available | ||||||
3 | information regarding
firearm manufacturing companies, | ||||||
4 | including
information provided by nonprofit organizations, | ||||||
5 | research
firms, and government entities; | ||||||
6 | (2) contacting asset managers contracted by the | ||||||
7 | retirement system that invest in firearm manufacturing | ||||||
8 | companies; and | ||||||
9 | (3) contacting other institutional investors that have
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10 | divested from or engaged with firearm manufacturing | ||||||
11 | companies. | ||||||
12 | The retirement system may retain an independent research | ||||||
13 | firm to identify firearm manufacturing companies in which the | ||||||
14 | retirement system has direct or indirect holdings. By the first | ||||||
15 | meeting of the retirement system following
the 90-day period | ||||||
16 | described in this subsection (b), the retirement system
shall | ||||||
17 | assemble all identified firearm manufacturing companies into a
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18 | firearm manufacturing companies list. | ||||||
19 | The retirement system shall update the firearm | ||||||
20 | manufacturing companies list annually based on evolving | ||||||
21 | information from,
among other sources, those listed in this | ||||||
22 | subsection (b). | ||||||
23 | (c) The retirement system shall adhere to
the following | ||||||
24 | procedures for companies on the firearm manufacturing | ||||||
25 | companies list: | ||||||
26 | (1) The retirement system shall determine the
firearm |
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1 | manufacturing companies on the firearm manufacturing | ||||||
2 | companies list in which the
retirement system owns direct | ||||||
3 | or indirect holdings. | ||||||
4 | (2) For each company newly identified in item (1) of | ||||||
5 | this subsection (c), the retirement system shall send a | ||||||
6 | written notice informing the firearm manufacturing company | ||||||
7 | of its status and that it may become subject to
divestment | ||||||
8 | by the retirement system. | ||||||
9 | (3) If, within 90 days after the retirement system's | ||||||
10 | first
engagement with a firearm manufacturing company | ||||||
11 | pursuant to this subsection (c), that
company ceases to | ||||||
12 | manufacture firearms, the company
shall be removed from the | ||||||
13 | firearm manufacturing companies list and the
provisions of | ||||||
14 | this Section shall cease to apply to it unless it
resumes | ||||||
15 | manufacturing firearms. | ||||||
16 | (d) If, after 90 days following the retirement system's | ||||||
17 | first
engagement with a firearm manufacturing company pursuant | ||||||
18 | to subsection (c), the
company continues to manufacture | ||||||
19 | firearms, the retirement system shall
sell, redeem, divest, or | ||||||
20 | withdraw all publicly traded
securities of the company from the | ||||||
21 | retirement system's assets under management within 12
months | ||||||
22 | after the company's most recent appearance on the
firearm | ||||||
23 | manufacturing companies list. | ||||||
24 | (e) The retirement system may not acquire
securities of | ||||||
25 | firearm manufacturing companies on the firearm manufacturing | ||||||
26 | companies list. |
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1 | (f) Each retirement system shall file a report with the | ||||||
2 | Public Pension Division of the Department of Insurance that | ||||||
3 | includes the firearm manufacturing companies list
within 30 | ||||||
4 | days after the list is created. This report shall be
made | ||||||
5 | available to the public. | ||||||
6 | Each retirement system shall file an annual report with the | ||||||
7 | Public Pension Division, which shall be made available to the | ||||||
8 | public, that includes all of the following: | ||||||
9 | (1) a summary of correspondence with companies engaged
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10 | by the retirement system under items (2) and (3) of | ||||||
11 | subsection (c); | ||||||
12 | (2) all investments sold, redeemed, divested, or
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13 | withdrawn in compliance with subsection (d); and | ||||||
14 | (3) all prohibited investments under subsection (e). | ||||||
15 | (g) With respect to actions
taken in compliance with this | ||||||
16 | Act, including all good-faith
determinations regarding | ||||||
17 | companies as required by this Act,
the retirement system is | ||||||
18 | exempt from any conflicting statutory or
common law | ||||||
19 | obligations, including any fiduciary duties under this Article | ||||||
20 | and any obligations with
respect to choice of asset managers, | ||||||
21 | investment funds, or
investments for the retirement system's | ||||||
22 | securities portfolios. | ||||||
23 | (h) If any provision of this Section or its application to | ||||||
24 | any person or circumstance is held invalid, the invalidity of | ||||||
25 | that provision or application does not affect other provisions | ||||||
26 | or applications of this Section that can be given effect |
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1 | without the invalid provision or application.
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2 | Section 99. Effective date. This Act takes effect upon | ||||||
3 | becoming law.
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