HB0959eng 104TH GENERAL ASSEMBLY

HB0959 Engrossed LRB104 04861 SPS 14888 b

AN ACT concerning State government.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Illinois Sustainable Investing Act is amended by changing Sections 5 and 10 and by adding Sections 25, 30, and 35 as follows:

(30 ILCS 238/5)

Sec. 5. Findings and purpose.

(a) The General Assembly finds that consideration of factors relevant to the environmental impact, social impact, and governance of investments is vital for maximizing the safety and performance of public funds. Such sustainability factors are indicative of the overall performance of an investment and are strong indicators of its long-term value. Public agencies and governments have a duty to recognize and evaluate these materially relevant factors.

(b) It is the purpose of this Act to prudently integrate sustainability factors into the investment decision-making, investment analysis, portfolio construction, due diligence, and investment ownership of public funds to maximize anticipated financial returns, minimize projected risks, more effectively execute fiduciary duties, and contribute to a more just, accountable, and sustainable State of Illinois.

(c) The General Assembly reaffirms its prior findings that factors relevant to the environmental impact, social impact, and governance of investments are indicative of the overall performance of an investment and that agencies and governments have a duty to recognize and evaluate these materially relevant factors.

(d) The General Assembly finds that other states have taken actions that may impede the ability of Illinois persons to take actions under sustainable investment policies consistent with the principles of this Act.

(e) It is the intent of the State of Illinois to foster an environment where not only agencies and governments but private entities can prudently consider materially relevant environmental, social, and governance factors in their investment decision-making, investment analysis, portfolio construction, due diligence, and investment ownership activities.

(f) It is the purpose of this Act to make it clear that State resources should not be used to advance efforts by any individual or government to impede Illinois persons' lawful sustainable investment activity as described in this Act and to provide recourse for Illinois persons who may be subject to such actions.

(Source: P.A. 101-473, eff. 1-1-20.)

(30 ILCS 238/10)

Sec. 10. Definitions. As used in this Act:

"Company proposal" means a proposal made by a company's shareholder that is included in the company's proxy statement, including the nomination of a director.

"Financial institution" means a bank, savings bank, or credit union established under the laws of the State of Illinois, another state, or the United States of America.

"Governmental unit" has the same meaning as in the Local Government Debt Reform Act.

"Investment manager" means a fiduciary who:

(1) is a fiduciary selected by a public agency, pension fund, retirement system, or governmental unit who has the power to manage, acquire, or dispose of any asset of a public agency, pension fund, retirement system or governmental unit;

(2) has acknowledged in writing that he or she is a fiduciary with respect to the public fund, retirement system, or pension fund; and

(3) is at least one of the following: (i) registered as an investment adviser under the federal Investment Advisers Act of 1940; (ii) registered as an investment adviser under the Illinois Securities Law of 1953; (iii) a bank, as defined in the Investment Advisers Act of 1940; or (iv) an insurance company authorized to transact business in this State.

"Investment policy" means a written investment policy adopted by a public agency or governmental unit which addresses safety of principal, liquidity of funds, and return on investment and which requires the investment portfolio be structured in such a manner as to provide sufficient liquidity to pay obligations as they come due.

"Lawful sustainable investment activity" means:

(1) any activity that is not unlawful under the laws of this State or under the laws of the United States taken to carry out a sustainable investment policy as described in this Act, regardless of whether the sustainable investment policy was adopted by a public agency, governmental unit, or any other entity doing business in Illinois;

(2) any action taken in furtherance of providing the following services that is not unlawful under the laws of this State or the United States:

(A) advice or recommendations on how to vote on a proxy proposal or company proposal;

(B) proxy statement research and analysis regarding a proxy proposal or company proposal;

(C) rating or research regarding corporate governance; or

(D) the development of proxy voting recommendations or policies, including establishing default recommendations or policies.

"Proxy proposal" means a proposal made by a company's shareholder that is included in the company's proxy statement, including the nomination of a director.

"Public agency" means the State of Illinois, the various counties, townships, cities, towns, villages, school districts, educational service regions, special road districts, public water supply districts, fire protection districts, drainage districts, levee districts, sewer districts, housing authorities, the Illinois Bank Examiners' Education Foundation, the Chicago Park District, and all other political corporations or subdivisions of the State of Illinois, now or hereafter created, whether herein specifically mentioned or not.

"Public funds" means current operating funds, special funds, interest and sinking funds, and funds of any kind or character belonging to or in the custody of any public agency.

"Sustainability factors" means factors that may have a material and relevant financial impact on the safety or performance of an investment and which are complementary to financial factors and financial accounting.

(Source: P.A. 103-324, eff. 1-1-24; revised 7-1-25.)

(30 ILCS 238/25 new)

Sec. 25. Conflict of law. Notwithstanding any general or special law or common law conflict of law rule to the contrary, the laws of this State shall govern in any case or controversy heard in this State related to lawful sustainable investment activity.

(30 ILCS 238/30 new)

Sec. 30. Prohibited State actions.

(a) Unless such a refusal is expressly prohibited by Illinois or federal law, the State may decline to provide any information to or expend or use any time, money, facilities, property, equipment, personnel, or other resources to assist any individual, or out-of-state officer, official, agency, entity, or department seeking to impose civil or criminal liability upon a person or entity for lawful sustainable investment activity.

(b) This Section does not apply if an individual or out-of-state officer, official, agency, entity, or department is investigating conduct that would be subject to civil or criminal liability under the laws of Illinois or the laws of the United States.

(30 ILCS 238/35 new)

Sec. 35. Right of action.

(a) If judgment is entered in any other state against any person residing or domiciled in Illinois, and if the judgment is based, in whole or in part, on the alleged provision, receipt, assistance in receipt or provision, material support for, or any theory of vicarious, joint, several, or conspiracy liability derived therefrom, for lawful sustainable investment activity that is permitted under the laws of this State, that person may recover damages from any party that brought the action leading to that judgment or has sought to enforce that judgment.

(b) Any person aggrieved by conduct in subsection (a) shall have a right of action in a State circuit court or as a supplemental claim in federal district court against any party that brought the action leading to that judgment or has sought to enforce that judgment. This lawsuit must be brought not later than 2 years after the violation of subsection (a).

(c) If the court finds that a violation of subsection (a) has occurred, the court may award to the plaintiff:

(1) actual damages created by the action that led to that judgment, including, but not limited to, money damages in the amount of the judgment in that other state and costs, expenses, and reasonable attorney's fees, including expert witness fees and other litigation expenses, spent in defending the action that resulted in the entry of the judgment in another state; and

(2) costs, expenses, and reasonable attorney's fees, including expert witness fees and other litigation expenses, incurred in bringing an action under this Act as may be allowed by the court.

(d) The provisions of this Act shall not apply to a judgment entered in another state that is based on:

(1) an action founded in contract, and for which a similar claim would exist under the laws of this State, brought or sought to be enforced by a party with a contractual relationship with the person that is the subject of the judgment entered in another state; or

(2) an action where no part of the acts that formed the basis for liability occurred in this State.