HB2708sam003 94TH GENERAL ASSEMBLY

Sen. Jacqueline Y. Collins

Filed: 11/28/2006

09400HB2708sam003 LRB094 03735 NHT 60716 a

AMENDMENT TO HOUSE BILL 2708

AMENDMENT NO. ______. Amend House Bill 2708, AS AMENDED, by replacing everything after the enacting clause with the following:

"Section 5. "AN ACT concerning State government, which may be cited as the Act to End Atrocities and Terrorism in the Sudan", approved June 27, 2005, Public Act 94-79, is amended by adding Sections 1 and 95 as follows:

(P.A. 94-79, Sec. 1 new)

Sec. 1. Findings. The Government of the United States has determined that the Republic of Sudan is a nation that sponsors terrorism and genocide.

The General Assembly finds that investments in enterprises that engage in commercial activities in the Republic of Sudan are inherently risky.

The General Assembly further finds and affirms that the people of the State, acting through their representatives, do not want to be associated with enterprises that engage in commercial activities in the Republic of Sudan.

(P.A. 94-79, Sec. 95 new)

Sec. 95. Severability. The provisions of this Act are severable under Section 1.31 of the Statute on Statutes.

Section 10. The Deposit of State Moneys Act is amended by changing Section 22.6 as follows:

(15 ILCS 520/22.6)

(For force and effect of certain provisions, see Section 90 of P.A. 94-79)

Sec. 22.6. Prohibited deposits.

(a) Notwithstanding any other provision of law, the State Treasurer shall not deposit any funds into or otherwise contract with any financial institution unless an expressly authorized officer of that financial institution annually certifies, in the manner and form established by the Treasurer, that the financial institution has implemented policies and practices that require loan recipients applicants to certify that they are not forbidden entities.

(b) For the purposes of this Section:

"Company" is any entity capable of affecting commerce, including but not limited to (i) a government, government agency, natural person, legal person, sole proprietorship, partnership, firm, corporation, subsidiary, affiliate, franchisor, franchisee, joint venture, trade association, financial institution, utility, public franchise, provider of financial services, trust, or enterprise; and (ii) any association thereof.

"Forbidden entity" means any of the following:

(1) The government of the Republic of the Sudan and any of its agencies, including but not limited to political units and subdivisions;

(2) Any company that is wholly or partially managed or controlled by the government of the Republic of the Sudan and any of its agencies, including but not limited to political units and subdivisions;

(3) Any company (i) that is established or organized under the laws of the Republic of the Sudan; or (ii) whose principal place of business is in the Republic of the Sudan;

(4) Any company (i) identified by the Office of Foreign Assets Control in the United States Department of the Treasury as sponsoring terrorist activities; or (ii) fined, penalized, or sanctioned by the Office of Foreign Assets Control in the United States Department of the Treasury for any violation of any United States rules and restrictions relating to the Republic of the Sudan that occurred at any time following the effective date of this Act; and

(5) Any company who has failed to certify under oath that it does not own or control any property or asset located in, have employees or facilities located in, provide goods or services to, obtain goods or services from, have distribution agreements with, issue credits or loans to, purchase bonds or commercial paper issued by, or invest in (i) the Republic of the Sudan; or (ii) any company domiciled in the Republic of the Sudan.

Notwithstanding the foregoing, the term "forbidden entity" shall exclude companies that transact business in Sudan under the law, license, or permit of the United States, including a license from the United States Department of the Treasury, and companies, except agencies of the Republic of the Sudan, who are certified as Non-Government Organizations by the United Nations, or who engage solely in (i) the provision of goods and services intended to relieve human suffering or to promote welfare, health, religious and spiritual activities, and education for humanitarian purposes or otherwise; or (ii) journalistic activities.

(c) In addition to any other penalties and remedies available under the law of Illinois and the United States, any transaction between a financial institution and a company that violates the provisions of this Act shall be void or voidable, at the joint discretion of the Treasurer and the financial institution.

(d) This Section does not apply to (a) linked deposits made by the Treasurer into financial institutions in return for that institution's commitment to provide, through loans or other financial support, agreed benefits in projects undertaken in the community; and (b) the purchase of depository, custodial, processing, and advisory services that are necessary to fulfill the Treasurer's obligations and responsibilities.

(e) If any provision of this Section or its application to any person or circumstance is held invalid, the invalidity of that provision or application does not affect other provisions or applications of this Section that can be given effect without the invalid provision or application.

(Source: P.A. 94-79, eff. 1-27-06; for force and effect of certain provisions, see Section 90 of P.A. 94-79.)

Section 15. The Illinois Pension Code is amended by changing Section 1-110.5 as follows:

(40 ILCS 5/1-110.5)

(For force and effect of certain provisions, see Section 90 of P.A. 94-79)

Sec. 1-110.5. Certain prohibited transactions.

(a) A fiduciary of a retirement system or pension fund established under this Code shall not transfer or disburse funds to, deposit into, acquire any bonds or commercial paper from, or otherwise loan to or invest in any entity unless, as provided in this Section, a certifying company the company charged with managing the assets of the retirement system or pension fund, at no additional cost to the fiduciary, certifies twice a year to the retirement system or pension fund fiduciary, in the time, manner, and form established by the Treasurer, that, with respect to investments in a publicly traded company, the certifying company has relied on information provided by an independent researching firm that specializes in global security risk and that:

(1) except for automatic dividend reinvestment, none of the retirement system or pension fund's assets for which the certifying company provides services or advice have been invested in a forbidden entity any time after January 27, 2006 (the effective date of Public Act 94-79) the fund managing company has not loaned to, invested in, or otherwise transferred any of the retirement system or pension fund's assets to a forbidden entity any time after the effective date of this Act;

(2) at least 60% of the retirement system or pension fund's assets for which the certifying company provides services or advice are not invested in forbidden entities at any time after January 27, 2007 ( more than twelve months after the effective date of Public Act 94-79) this Act; and

(3) at least 100% of the retirement system or pension fund's assets for which the certifying company provides services or advice are not invested in forbidden entities at any time after July 27, 2007 ( more than eighteen months after the effective date of Public Act 94-79) this Act.

(b) For purposes of this Section:

"Certifying company" means a company that (1) directly provides asset management services or advice to a retirement system or pension fund; (2) as directly authorized or requested by a retirement system or pension fund (A) identifies particular investment options for consideration or approval; (B) chooses particular investment options; or (C) allocates particular amounts to be invested; or (3) manages mutual funds or a similar mutual compilation of investment in publicly traded companies and is willing to fulfill the certification requirements established in subsection (a) of this Section. In the event that no company, except officers of a retirement system or pension fund, meets the criteria set forth this paragraph, "certifying company" shall mean the retirement system or pension fund officer who, as designated by the board, executes the investment decisions made by the board, or, in the alternative, the company that the board authorizes to complete the certification as the agent of said officer.

"Company" is any entity capable of affecting commerce, including but not limited to (i) a government, government agency, natural person, legal person, sole proprietorship, partnership, firm, corporation, subsidiary, affiliate, franchisor, franchisee, joint venture, trade association, financial institution, utility, public franchise, provider of financial services, trust, or enterprise; and (ii) any association thereof.

"Forbidden entity" means any of the following:

(1) The government of the Republic of the Sudan and any of its agencies, including but not limited to political units and subdivisions;

(2) Any company that is wholly or partially managed or controlled by the government of the Republic of the Sudan and any of its agencies, including but not limited to political units and subdivisions;

(3) Any company (i) that is established or organized under the laws of the Republic of the Sudan; (ii) whose principal place of business is in the Republic of the Sudan;

(4) Any company (i) identified by the Office of Foreign Assets Control in the United States Department of the Treasury as sponsoring terrorist activities; or (ii) fined, penalized, or sanctioned by the Office of Foreign Assets Control in the United States Department of the Treasury for any violation of any United States rules and restrictions relating to the Republic of the Sudan that occurred at any time following the effective date of this Act; and

(5) (i) Any publicly traded company who has been identified by an independent researching firm that specializes in global security risk and that has been retained by a certifying company as provided in subsection (a) of this Section as being a company that owns or controls property or assets located in, has employees or facilities located in, provides goods or services to, obtain goods or services from, has distribution agreements with, issue credits or loans to, purchase bonds or commercial paper issued by, or invest in (A) (i) the Republic of the Sudan; or (B) (ii) any company domiciled in the Republic of the Sudan; and (ii) any mutual fund or similar mutual compilation of investment in publicly traded companies that, according to the most recent report published or filed by the mutual company at least 2 months before the certification date, contains a company identified by said independent researching firm as being a company defined in item (i) of this paragraph (5); and

(6) Any private fund that, at no additional cost to the retirement system or pension fund:

(i) fails to submit to the certifying company an affidavit sworn under oath in which an expressly authorized officer of the private fund avers that the private fund (A) does not own or control any property or asset located in the Republic of the Sudan and (B) did not transact commercial business in the Republic of the Sudan; or

(ii) fails to (A) submit to the certifying company a certificate in which an expressly authorized officer of the private fund certifies that the private fund, based on reasonable due diligence, has determined that, since January 27, 2006 (the effective date of Public Act 94-79), other than direct or indirect investments in companies certified as Non-Government Organizations by the United Nations, the private fund has no direct or indirect investment in any company (I) organized under the laws of the Republic of Sudan; (II) whose principal place of business is in the Republic of Sudan; (III) that conducts operations in the Republic of Sudan; or (IV) that owns any interest in real estate in the Republic of Sudan; and (B) agree that the retirement system or pension fund, directly or through an agent, may from time to time review the private fund's certification process based on the periodic reports received by the private fund. Any non publicly-traded company that fails to submit to the fund managing company an affidavit sworn under oath in which an expressly authorized officer of the company avers that the company (i) does not own or control any property or asset located in the Republic of the Sudan; and (ii) did not transact commercial business in the Republic of the Sudan. Notwithstanding the foregoing, the term "forbidden entity" shall exclude companies that transact business in Sudan under the law, license, or permit of the United States, including a license from the United States Department of the Treasury, and companies, except agencies of the Republic of the Sudan, who are certified as Non-Government Organizations by the United Nations, or who engage solely in (i) the provision of goods and services intended to relieve human suffering or to promote welfare, health, religious and spiritual activities, and education or humanitarian purposes or otherwise; or (ii) journalistic activities.

"Private fund" means any private equity fund, private equity fund of funds, venture capital fund, hedge fund, hedge fund of funds, real estate fund, or other investment vehicle that is not publicly traded.

(c) In addition to any other penalties and remedies available under the law of Illinois and the United States, any transaction that violates the provisions of this Act shall be void or voidable, at the sole discretion of the fiduciary.

(d) If a private fund fails to provide the certification required in subparagraph (ii) of item (6) of the definition of "forbidden entity" in subsection (b) of this Section:

(1) the certifying company shall have 90 days to divest or attempt in good faith to divest its interest in the companies for which such certification has not been made, unless such divestment would be inconsistent with its fiduciary obligations to the other investors in the private fund; if the asset managing company charged with providing the certification required by subsection (a) of this Section fails to divest such interest within 90 days, it shall not unreasonably withhold its consent to a transfer of the retirement system or pension fund's interest in said private fund; and

(2) retirement systems and pension funds established under this Code shall be prohibited from directly or indirectly investing in that private fund for a period of 3 years after the date upon which it failed to provide the required certification.

(e) The certification required under subsection (a) shall be provided at no additional cost to the retirement system or pension fund, unless the certifying company is the retirement system or pension fund officer who executes the investment decisions made by the board or the company that the board authorizes to complete the certification as the agent of the officer.

(f) The changes made to this Section by this amendatory Act of the 94th General Assembly shall have full force and effect until such time as the government of the United States, through Executive Order or otherwise, rescinds Executive Order 13067, or until such time as these provisions are repealed or modified by the General Assembly. The changes made to this Section by this amendatory Act of the 94th General Assembly shall be construed under the laws of the State of Illinois and, where applicable, the laws of the United States.

(g) If any provision of this Section or its application to any person or circumstance is held invalid, the invalidity of that provision or application does not affect other provisions or applications of this Section that can be given effect without the invalid provision or application.

(Source: P.A. 94-79, eff. 1-27-06; for force and effect of certain provisions, see Section 90 of P.A. 94-79.)

Section 20. The State Lawsuit Immunity Act is amended by adding Section 1.7 as follows:

(745 ILCS 5/1.7 new)

Sec. 1.7. Limited capacity of bodies politic and corporate and other public bodies to bring actions against governmental officers, officials, and employees.

(a) Except as provided in the Illinois Public Labor Relations Act, the Court of Claims act, and State Officials and Employees Ethics Act, and Section 1.5 of this Act, no governmental entity, no quasi-governmental entity, no body politic and corporate, and no other body created by or under the authority of statute or executive order, and no officer, official, employee, or agent of such entity or body, had or has the authority to make any officer, official, or employee of the State in his or her official capacity as such an officer, official, or employee, a defendant or party in any court. This prohibition does not apply, however, if both the officer, official, or employee and the Illinois Attorney General consent in writing that the officer, official, or employee may be made a defendant or party in the Illinois courts. Such consent shall be filed of record with the court, and shall be necessary for jurisdiction. Any consent, as a matter of law, shall be consent only to an action in the Illinois courts and shall not be consent to any action commenced in or transferred or removed to a federal court or a court of any other state jurisdiction.

(b) This Section applies to all pending actions and all actions commenced on or after the effective date of this amendatory Act of the 94th General Assembly.

(c) The regulation of the authority of bodies politic and corporate, and their officers, officials, employees, and agents, to make a governmental officer, official, or employee, in his or her capacity as such an officer, official, or employees, a defendant or party in any court is an exclusive power and function of the State. This Section is a denial and limitation of home rule powers and functions under subsection (h) of Section 6 of Article VII of the Illinois Constitution.

(d) If any provision of this Section or its application to any person or circumstance is held invalid, the invalidity of that provision or application does not affect other provisions or applications of this Section that can be given effect without the invalid provision or application.

Section 97. Severability. The provisions of this Act are severable under Section 1.31 of the Statute on Statutes.

Section 99. Effective date. This Act takes effect upon becoming law.".