Illinois General Assembly

  Bills & Resolutions  
  Compiled Statutes  
  Public Acts  
  Legislative Reports  
  IL Constitution  
  Legislative Guide  
  Legislative Glossary  

 Search By Number
 (example: HB0001)
Search Tips

Search By Keyword

Full Text of SB2091  100th General Assembly

SB2091 100TH GENERAL ASSEMBLY

  
  

 


 
100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
SB2091

 

Introduced 2/10/2017, by Sen. Martin A. Sandoval

 

SYNOPSIS AS INTRODUCED:
 
30 ILCS 500/50-36.5 new
40 ILCS 5/1-110.16

    Amends the Illinois Procurement Code. Prohibits a State agency from entering into a contract subject to the Code with a business that contracts with the federal government to build a wall along the border of Mexico and the United States of America. Amends the General Provisions Article of the Illinois Pension Code. Requires the Illinois Investment Policy Board to make its best efforts to identify all companies that contract to build a border wall and include those companies in the list of restricted companies distributed to each retirement system and the Illinois State Board of Investment. Effective immediately.


LRB100 09977 RPS 20148 b

FISCAL NOTE ACT MAY APPLY
PENSION IMPACT NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB2091LRB100 09977 RPS 20148 b

1    AN ACT concerning finance.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Procurement Code is amended by
5adding Section 50-36.5 as follows:
 
6    (30 ILCS 500/50-36.5 new)
7    Sec. 50-36.5. Prohibition on contracts with businesses
8that contract to build a border wall. Notwithstanding any other
9provision of this Code, on and after the effective date of this
10amendatory Act of the 100th General Assembly, a State agency
11shall not enter into a contract subject to this Code with a
12business that contracts to build a border wall. In determining
13whether a business contracts to build a border wall, a State
14agency shall consult the list of restricted companies developed
15by the Illinois Investment Policy Board in accordance with
16Section 1-110.16 of the Illinois Pension Code. For the purposes
17of this Section, "contracts to build a border wall" means
18entering into a contract with the federal government for the
19purposes of building a wall along the border of Mexico and the
20United States of America.
 
21    Section 10. The Illinois Pension Code is amended by
22changing Section 1-110.16 as follows:
 

 

 

SB2091- 2 -LRB100 09977 RPS 20148 b

1    (40 ILCS 5/1-110.16)
2    Sec. 1-110.16. Transactions prohibited by retirement
3systems; companies that boycott Israel, companies that
4contract to build a border wall, Iran-restricted companies, and
5Sudan-restricted companies.
6    (a) As used in this Section:
7        "Boycott Israel" means engaging in actions that are
8    politically motivated and are intended to penalize,
9    inflict economic harm on, or otherwise limit commercial
10    relations with the State of Israel or companies based in
11    the State of Israel or in territories controlled by the
12    State of Israel.
13        "Company" means any sole proprietorship, organization,
14    association, corporation, partnership, joint venture,
15    limited partnership, limited liability partnership,
16    limited liability company, or other entity or business
17    association, including all wholly owned subsidiaries,
18    majority-owned subsidiaries, parent companies, or
19    affiliates of those entities or business associations,
20    that exist for the purpose of making profit.
21        "Contract to build a border wall" means entering into a
22    contract with the federal government for the purposes of
23    building a wall along the border of Mexico and the United
24    States of America.
25        "Illinois Investment Policy Board" means the board

 

 

SB2091- 3 -LRB100 09977 RPS 20148 b

1    established under subsection (b) of this Section.
2        "Direct holdings" in a company means all publicly
3    traded securities of that company that are held directly by
4    the retirement system in an actively managed account or
5    fund in which the retirement system owns all shares or
6    interests.
7        "Indirect holdings" in a company means all securities
8    of that company that are held in an account or fund, such
9    as a mutual fund, managed by one or more persons not
10    employed by the retirement system, in which the retirement
11    system owns shares or interests together with other
12    investors not subject to the provisions of this Section or
13    that are held in an index fund.
14        "Iran-restricted company" means a company that meets
15    the qualifications under Section 1-110.15 of this Code.
16        "Private market fund" means any private equity fund,
17    private equity funds of funds, venture capital fund, hedge
18    fund, hedge fund of funds, real estate fund, or other
19    investment vehicle that is not publicly traded.
20        "Restricted companies" means companies that boycott
21    Israel, companies that contract to build a border wall,
22    Iran-restricted companies, and Sudan-restricted companies.
23        "Retirement system" means a retirement system
24    established under Article 2, 14, 15, 16, or 18 of this Code
25    or the Illinois State Board of Investment.
26        "Sudan-restricted company" means a company that meets

 

 

SB2091- 4 -LRB100 09977 RPS 20148 b

1    the qualifications under Section 1-110.6 of this Code.
2    (b) There shall be established an Illinois Investment
3Policy Board. The Illinois Investment Policy Board shall
4consist of 7 members. Each board of a pension fund or
5investment board created under Article 15, 16, or 22A of this
6Code shall appoint one member, and the Governor shall appoint 4
7members.
8    (c) Notwithstanding any provision of law to the contrary,
9beginning January 1, 2016, Sections 110.15 and 1-110.6 of this
10Code shall be administered in accordance with this Section.
11    (d) By April 1, 2016, the Illinois Investment Policy Board
12shall make its best efforts to identify all Iran-restricted
13companies, Sudan-restricted companies, and companies that
14boycott Israel and assemble those identified companies into a
15list of restricted companies, to be distributed to each
16retirement system.
17    These efforts shall include the following, as appropriate
18in the Illinois Investment Policy Board's judgment:
19        (1) reviewing and relying on publicly available
20    information regarding Iran-restricted companies,
21    Sudan-restricted companies, and companies that boycott
22    Israel, including information provided by nonprofit
23    organizations, research firms, and government entities;
24        (2) contacting asset managers contracted by the
25    retirement systems that invest in Iran-restricted
26    companies, Sudan-restricted companies, and companies that

 

 

SB2091- 5 -LRB100 09977 RPS 20148 b

1    boycott Israel;
2        (3) contacting other institutional investors that have
3    divested from or engaged with Iran-restricted companies,
4    Sudan-restricted companies, and companies that boycott
5    Israel; and
6        (4) retaining an independent research firm to identify
7    Iran-restricted companies, Sudan-restricted companies, and
8    companies that boycott Israel.
9    By May 1, 2017, the Illinois Investment Policy Board shall
10make its best efforts to identify all companies that contract
11to build a border wall and include those companies in the list
12of restricted companies distributed to each retirement system.
13These efforts shall include the following, as appropriate in
14the Illinois Investment Policy Board's judgment:
15        (1) reviewing and relying on publicly available
16    information regarding companies that contract to build a
17    border wall, including information provided by nonprofit
18    organizations, research firms, and government entities;
19        (2) contacting asset managers contracted by the
20    retirement systems that invest in companies that contract
21    to build a border wall;
22        (3) contacting other institutional investors that have
23    divested from or engaged with companies that contract to
24    build a border wall; and
25        (4) retaining an independent research firm to identify
26    companies that contract to build a border wall.

 

 

SB2091- 6 -LRB100 09977 RPS 20148 b

1    The Illinois Investment Policy Board shall review the list
2of restricted companies on a quarterly basis based on evolving
3information from, among other sources, those listed in this
4subsection (d) and distribute any updates to the list of
5restricted companies to the retirement systems.
6    (e) The Illinois Investment Policy Board shall adhere to
7the following procedures for companies on the list of
8restricted companies:
9        (1) For each company newly identified in subsection
10    (d), the Illinois Investment Policy Board shall send a
11    written notice informing the company of its status and that
12    it may become subject to divestment by the retirement
13    systems.
14        (2) If, following the Illinois Investment Policy
15    Board's engagement pursuant to this subsection (e) with a
16    restricted company, that company ceases activity that
17    designates the company to be an Iran-restricted company, a
18    Sudan-restricted company, or a company that boycotts
19    Israel, the company shall be removed from the list of
20    restricted companies and the provisions of this Section
21    shall cease to apply to it unless it resumes such
22    activities.
23    (f) The retirement system shall adhere to the following
24procedures for companies on the list of restricted companies:
25        (1) The retirement system shall identify those
26    companies on the list of restricted companies in which the

 

 

SB2091- 7 -LRB100 09977 RPS 20148 b

1    retirement system owns direct holdings and indirect
2    holdings.
3        (2) The retirement system shall instruct its
4    investment advisors to sell, redeem, divest, or withdraw
5    all direct holdings of restricted companies from the
6    retirement system's assets under management in an orderly
7    and fiduciarily responsible manner within 12 months after
8    the company's most recent appearance on the list of
9    restricted companies.
10        (3) The retirement system may not acquire securities of
11    restricted companies.
12        (4) The provisions of this subsection (f) do not apply
13    to the retirement system's indirect holdings or private
14    market funds. The Illinois Investment Policy Board shall
15    submit letters to the managers of those investment funds
16    containing restricted companies requesting that they
17    consider removing the companies from the fund or create a
18    similar actively managed fund having indirect holdings
19    devoid of the companies. If the manager creates a similar
20    fund, the retirement system shall replace all applicable
21    investments with investments in the similar fund in an
22    expedited timeframe consistent with prudent investing
23    standards.
24    (g) Upon request, and at least annually, each retirement
25system shall provide the Illinois Investment Policy Board with
26information regarding investments sold, redeemed, divested, or

 

 

SB2091- 8 -LRB100 09977 RPS 20148 b

1withdrawn in compliance with this Section.
2    (h) Notwithstanding any provision of this Section to the
3contrary, a retirement system may cease divesting from
4companies pursuant to subsection (f) if clear and convincing
5evidence shows that the value of investments in such companies
6becomes equal to or less than 0.5% of the market value of all
7assets under management by the retirement system. For any
8cessation of divestment authorized by this subsection (h), the
9retirement system shall provide a written notice to the
10Illinois Investment Policy Board in advance of the cessation of
11divestment, setting forth the reasons and justification,
12supported by clear and convincing evidence, for its decision to
13cease divestment under subsection (f).
14    (i) The cost associated with the activities of the Illinois
15Investment Policy Board shall be borne by the boards of each
16pension fund or investment board created under Article 15, 16,
17or 22A of this Code.
18    (j) With respect to actions taken in compliance with this
19Section, including all good-faith determinations regarding
20companies as required by this Section, the retirement system
21and Illinois Investment Policy Board are exempt from any
22conflicting statutory or common law obligations, including any
23fiduciary duties under this Article and any obligations with
24respect to choice of asset managers, investment funds, or
25investments for the retirement system's securities portfolios.
26    (k) It is not the intent of the General Assembly in

 

 

SB2091- 9 -LRB100 09977 RPS 20148 b

1enacting Public Act 99-128 this amendatory Act of the 99th
2General Assembly to cause divestiture from any company based in
3the United States of America. The Illinois Investment Policy
4Board shall consider this intent when developing or reviewing
5the list of restricted companies.
6    (l) If any provision of Public Act 99-128 or this
7amendatory Act of the 100th General Assembly this amendatory
8Act of the 99th General Assembly or its application to any
9person or circumstance is held invalid, the invalidity of that
10provision or application does not affect other provisions or
11applications of Public Act 99-128 or this amendatory Act of the
12100th General Assembly this amendatory Act of the 99th General
13Assembly that can be given effect without the invalid provision
14or application.
15(Source: P.A. 99-128, eff. 7-23-15.)
 
16    Section 99. Effective date. This Act takes effect upon
17becoming law.