093_HB3053

 
                                     LRB093 06827 JLS 06972 b

 1        AN ACT concerning business practices.

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

 4        Section 5.  The Deposit of State Moneys Act is amended by
 5    adding Section 22.6 as follows:

 6        (15 ILCS 520/22.6 new)
 7        Sec. 22.6.  Prohibited investments.  Notwithstanding  any
 8    other provision of this Act to the contrary, State moneys may
 9    not  be  invested  in  any publicly held corporation that was
10    formerly incorporated in the United States and that after the
11    year 1998 has incorporated in  the  United  States  and  that
12    after  the  year  1998 has incorporated in a foreign country,
13    allowing it to avoid taxes imposed by the United States or  a
14    state  thereof, referred to in this Section as an "expatriate
15    corporation". No State moneys shall remain  invested  in  the
16    securities  or other obligations of an expatriate corporation
17    after January 1, 2006 unless the disinvestment is  determined
18    to  be  adverse  to  the State. Nothing in this Section shall
19    require disinvestment in an index fund.

20        Section 10.  The State Finance Act is amended  by  adding
21    Section 5.595 as follows:

22        (30 ILCS 105/5.595 new)
23        Sec. 5.595.  The Corporate Crime Fund.

24        Section  15.  The  Public Funds Investment Act is amended
25    by adding Section 2.6 as follows:

26        (30 ILCS 235/2.6 new)
27        Sec. 2.6.  Prohibited  investments.  Notwithstanding  any
 
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 1    other provision of this Act to the contrary, public funds may
 2    not  be  invested  in  any publicly held corporation that was
 3    formerly incorporated in the United States and that after the
 4    year 1998 has incorporated in  the  United  States  and  that
 5    after  the  year  1998 has incorporated in a foreign country,
 6    allowing it to avoid taxes imposed by the United States or  a
 7    state  thereof, referred to in this Section as an "expatriate
 8    corporation". No public funds shall remain  invested  in  the
 9    securities  or other obligations of an expatriate corporation
10    after January 1, 2006 unless the disinvestment is  determined
11    to  be  adverse to the public agency. Nothing in this Section
12    shall require disinvestment in an index fund.

13        Section 20.  The Illinois  Pension  Code  is  amended  by
14    adding Section 1-109.3 as follows:

15        (40 ILCS 5/1-109.3 new)
16        Sec. 1-109.3.  Prohibited advisor; investments.
17        (a)  The  State  Board  of  Investment  and the boards of
18    trustees of the State-funded  retirement  systems  shall  not
19    employ  an  investment  advisor unless the investment advisor
20    complies with all of the following:
21             (1)  Before investing the assets of the system in  a
22        company,    an    investment   advisor   shall   disclose
23        periodically any  client  relationship  with  a  company,
24        including  management of corporate 401(k) plans or 403(b)
25        plans, where the  investment  advisor  could  invest  the
26        assets of the system in the securities of the client.
27             (2)  Before  investing the assets of the system in a
28        company, an investment advisor shall:
29                  (A)  consider the corporate governance policies
30             and practices of the company; and
31                  (B)  consider the quality and integrity of  the
32             company's  accounting  and financial data, including
 
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 1             its  10-K,  10-Q,  and  other  public  filings   and
 2             statements,   and   whether  the  company's  outside
 3             auditors are prevented from providing consulting  or
 4             non-audit services to the company.
 5             (3)  Before  investing the assets of the system in a
 6        company, an investment advisor shall consider  whether  a
 7        majority  of  its board of directors are not employees of
 8        the company or persons who do  not  receive  compensation
 9        for their professional services to the company.
10             (4)  An  investment  advisor  shall  not  invest the
11        assets of the system in a company that is currently under
12        investigation  by  the  United  States   Securities   and
13        Exchange  System,  the Illinois Securities Department, or
14        both.
15        (b)  Notwithstanding any other provision of this  Act  to
16    the contrary, assets of the system may not be invested in any
17    publicly  held  corporation that was formerly incorporated in
18    the  United  States  and  that  after  the  year   1998   has
19    incorporated  in  the  United  States and that after the year
20    1998 has incorporated in a foreign country,  allowing  it  to
21    avoid  taxes imposed by the United States or a state thereof,
22    referred to in this Section as an  "expatriate  corporation".
23    No  assets  of  the  system  shall  remain  invested  in  the
24    securities  or other obligations of an expatriate corporation
25    after January 1, 2006 unless the disinvestment is  determined
26    to  be  adverse to the public agency. Nothing in this Section
27    shall require disinvestment in an index fund.

28        Section 25.  The Criminal Code  of  1961  is  amended  by
29    changing  Section 29A-3 and adding Sections 17-26, 17-27, and
30    29A-4 as follows:

31        (720 ILCS 5/17-26 new)
32        Sec. 17-26.  Misconduct by a corporate official.
 
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 1        (a)  A person is guilty of a crime when:
 2             (1)  being a director of a corporation, he knowingly
 3        with a purpose to defraud, concurs in any vote or act  of
 4        the  directors  of the corporation, or any of them, which
 5        has the purpose of:
 6                  (A)  making a dividend  except  in  the  manner
 7             provided by law;
 8                  (B)  dividing,  withdrawing  or  in  any manner
 9             paying any stockholder any part of the capital stock
10             of the corporation except in the manner provided  by
11             law;
12                  (C)  discounting or receiving any note or other
13             evidence  of  debt  in  payment of an installment of
14             capital stock actually called in and required to  be
15             paid,  or  with  purpose  of  providing the means of
16             making such payment;
17                  (D)  receiving or discounting any note or other
18             evidence of debt with the purpose  of  enabling  any
19             stockholder  to  withdraw any part of the money paid
20             in by him on his stock; or
21                  (E)  applying any portion of the funds of  such
22             corporation, directly or indirectly, to the purchase
23             of  shares  of  its  own stock, except in the manner
24             provided by law; or
25             (2)  being a director of officer of  a  corporation,
26        he, with purpose to defraud:
27                  (A)  issues,   participates   in   issuing,  or
28             concurs in a vote  to  issue  any  increase  of  its
29             capital stock beyond the amount of the capital stock
30             thereof, duly authorized by or in pursuance of law;
31                  (B)  sells,  or  agrees to sell, or is directly
32             interested in the sale of any share of stock of such
33             corporation, or in any agreement to sell such stock,
34             unless at the time of the sale or agreement he is an
 
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 1             actual  owner  of  such  share,  provided  that  the
 2             foregoing shall not apply to a sale by or on  behalf
 3             of  an  underwriter  or  dealer in connection with a
 4             bona fide public offering of shares of stock of such
 5             corporation;
 6                  (C)  executes a scheme or attempts to execute a
 7             scheme  to  obtain  any  share  of  stock  of   such
 8             corporation by means of false representation; or
 9             (3)  Being  a  director of officer of a corporation,
10        he  with  purpose  to  defraud  or  evade   a   financial
11        disclosure  reporting  requirement  of  this  State or of
12        Section 13(A) or 15(D) of the Securities Exchange Act  of
13        1934, as amended, 15 U. S. C. 78M(A) or 78O(D), he:
14                  (A)  causes  or attempts to cause a corporation
15             or accounting firm representing the  corporation  or
16             any  other  individual  or  entity to fail to file a
17             financial disclosure report as required by State  or
18             federal law; or
19                  (B)  causes  or attempts to cause a corporation
20             or accounting firm representing the  corporation  or
21             any  other  individual or entity to file a financial
22             disclosure report, as required by State  or  federal
23             law,   that   contains   a   material   omission  or
24             misstatement of fact.
25        (b)  If the benefit derived  from  a  violation  of  this
26    Section  is  $500,000  or  more,  the offender is guilty of a
27    Class 1 felony. If the benefit derived from  a  violation  of
28    this Section is less than $500,000, the offender is guilty of
29    a Class 2 felony.

30        (720 ILCS 5/17-27 new)
31        Sec. 17-27.  Fraud in insolvency.
32        (a)  A   person   commits   a   crime  if,  knowing  that
33    proceedings have or  are  about  to  be  instituted  for  the
 
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 1    appointment  of  a  receiver  or  other  person  entitled  to
 2    administer property for the benefit of creditors, or that any
 3    other composition or liquidation for the benefit of creditors
 4    has been or is about to be made, he:
 5             (1)  destroys,    removes,    conceals,   encumbers,
 6        transfers,  or  otherwise  deals  with  any  property  or
 7        obtains any  substantial  part  of  or  interest  in  the
 8        debtor's  estate  with  purpose to defeat or obstruct the
 9        claim of any  creditor,  or  otherwise  to  obstruct  the
10        operation  of  any  law  relating  to  administration  of
11        property for the benefit of creditors;
12             (2)  knowingly   falsifies  any  writing  or  record
13        relating to the property; or
14             (3)  knowingly misrepresents or refuses to  disclose
15        to  a  receiver  or  other  person entitled to administer
16        property for the benefit  of  creditors,  the  existence,
17        amount,  or  location  of  the  property,  or  any  other
18        information  which the actor could be legally required to
19        furnish in relation to such administration.
20        (b)  If the benefit derived  from  a  violation  of  this
21    Section  in  $500,000  or  more,  the offender is guilty of a
22    Class 1 felony. If the benefit derived from  a  violation  of
23    this Section is less than $500,000, the offender is guilty of
24    a Class 2 felony.

25        (720 ILCS 5/29A-3) (from Ch. 38, par. 29A-3)
26        Sec. 29A-3.  Sentence.
27        (a)  If  the  benefit offered, conferred, or agreed to be
28    conferred, solicited, accepted or agreed to  be  accepted  is
29    less  than  $500,000,  commercial bribery or commercial bribe
30    receiving is a business offense for which  a  fine  shall  be
31    imposed not to exceed $5,000.
32        (b)  If  the  benefit offered, conferred, or agreed to be
33    conferred, solicited, accepted, or agreed to be  accepted  in
 
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 1    violation  of  this Article is $500,000 or more, the offender
 2    is guilty of a Class 1 felony.
 3    (Source: P.A. 77-2638.)

 4        (720 ILCS 5/29A-4 new)
 5        Sec. 29A-4.  Corporate Crime Fund.
 6        (a)  In addition to any fines, penalties, and assessments
 7    otherwise authorized under this Code, any person convicted of
 8    a violation of this Article shall be assessed  a  penalty  of
 9    not  more  than 3 times the value of all property involved in
10    the criminal activity.
11        (b)  The penalties assessed under subsection (a) shall be
12    deposited into the  Corporate  Crime  Fund,  a  special  fund
13    hereby  created  in  the  State  treasury. Moneys in the Fund
14    shall be used  to  make  restitution  to  a  person  who  has
15    suffered  property  loss  as  a  result of violations of this
16    Article. The  court  may  determine  the  reasonable  amount,
17    terms,  and conditions of the restitution. In determining the
18    amount and method of payment of restitution, the court  shall
19    take into account all financial resources of the defendant.