Full Text of HB4011 99th General Assembly
HB4011ham003 99TH GENERAL ASSEMBLY | Rep. Sara Feigenholtz Filed: 4/20/2015
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| 1 | | AMENDMENT TO HOUSE BILL 4011
| 2 | | AMENDMENT NO. ______. Amend House Bill 4011 by replacing | 3 | | everything after the enacting clause with the following:
| 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; companies that boycott Israel, Iran-restricted | 9 | | companies, and Sudan-restricted companies. | 10 | | (a) As used in this Section: | 11 | | "Boycott Israel" means engaging in actions that are | 12 | | politically motivated and are intended to penalize, | 13 | | inflict economic harm on, or otherwise limit commercial | 14 | | relations with the State of Israel or companies based in | 15 | | the State of Israel or in territories controlled by the | 16 | | State of Israel. |
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| 1 | | "Company" means any sole proprietorship, organization, | 2 | | association, corporation, partnership, joint venture, | 3 | | limited partnership, limited liability partnership, | 4 | | limited liability company, or other entity or business | 5 | | association, including all wholly owned subsidiaries, | 6 | | majority-owned subsidiaries, parent companies, or | 7 | | affiliates of those entities or business associations, | 8 | | that exist for the purpose of making profit. | 9 | | "Illinois Investment Policy Board" means the board | 10 | | established under subsection (b) of this Section. | 11 | | "Direct holdings" in a company means all publicly | 12 | | traded securities of that company that are held directly by | 13 | | the retirement system in an actively managed account or | 14 | | fund in which the retirement system owns all shares or | 15 | | interests. | 16 | | "Indirect holdings" in a company means all securities | 17 | | of that company that are held in an account or fund, such | 18 | | as a mutual fund, managed by one or more persons not | 19 | | employed by the retirement system, in which the retirement | 20 | | system owns shares or interests together with other | 21 | | investors not subject to the provisions of this Section or | 22 | | that are held in an index fund. | 23 | | "Iran-restricted company" means a company that meets | 24 | | the qualifications under Section 1-110.15 of this Code. | 25 | | "Private market fund" means any private equity fund, | 26 | | private equity funds of funds, venture capital fund, hedge |
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| 1 | | fund, hedge fund of funds, real estate fund, or other | 2 | | investment vehicle that is not publicly traded. | 3 | | "Restricted companies" means companies that boycott | 4 | | Israel, Iran-restricted companies, and Sudan-restricted | 5 | | companies. | 6 | | "Retirement system" means a retirement system | 7 | | established under Article 2, 14, 15, 16, or 18 of this Code | 8 | | or the Illinois State Board of Investment. | 9 | | "Sudan-restricted company" means a company that meets | 10 | | the qualifications under Section 1-110.6 of this Code. | 11 | | (b) There shall be established an Illinois Investment | 12 | | Policy Board. The Illinois Investment Policy Board shall | 13 | | consist of 7 members. Each board of a pension fund or | 14 | | investment board created under Article 15, 16, or 22A of this | 15 | | Code shall appoint one member, and the Governor shall appoint 4 | 16 | | members. | 17 | | (c) Notwithstanding any provision of law to the contrary, | 18 | | beginning January 1, 2016, Sections 110.15 and 1-110.6 of this | 19 | | Code shall be administered in accordance with this Section. | 20 | | (d) By April 1, 2016, the Illinois Investment Policy Board | 21 | | shall make its best efforts to identify all Iran-restricted | 22 | | companies, Sudan-restricted companies, and companies that | 23 | | boycott Israel and assemble those identified companies into a | 24 | | list of restricted companies, to be distributed to each | 25 | | retirement system. | 26 | | These efforts shall include the following, as appropriate |
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| 1 | | in the Illinois Investment Policy Board's judgment: | 2 | | (1) reviewing and relying on publicly available | 3 | | information regarding Iran-restricted companies, | 4 | | Sudan-restricted companies, and companies that boycott | 5 | | Israel, including information provided by nonprofit | 6 | | organizations, research firms, and government entities; | 7 | | (2) contacting asset managers contracted by the | 8 | | retirement systems that invest in Iran-restricted | 9 | | companies, Sudan-restricted companies, and companies that | 10 | | boycott Israel; | 11 | | (3) contacting other institutional investors that have | 12 | | divested from or engaged with Iran-restricted companies, | 13 | | Sudan-restricted companies, and companies that boycott | 14 | | Israel; and | 15 | | (4) retaining an independent research firm to identify | 16 | | Iran-restricted companies, Sudan-restricted companies, and | 17 | | companies that boycott Israel. | 18 | | The Illinois Investment Policy Board shall review the list | 19 | | of restricted companies on a quarterly basis based on evolving | 20 | | information from, among other sources, those listed in this | 21 | | subsection (d) and distribute any updates to the list of | 22 | | restricted companies to the retirement systems. | 23 | | (e) The Illinois Investment Policy Board shall adhere to | 24 | | the following procedures for companies on the list of | 25 | | restricted companies: | 26 | | (1) For each company newly identified in subsection |
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| 1 | | (d), the Illinois Investment Policy Board shall send a | 2 | | written notice informing the company of its status and that | 3 | | it may become subject to divestment by the retirement | 4 | | systems. | 5 | | (2) If, following the Illinois Investment Policy | 6 | | Board's engagement pursuant to this subsection (e) with a | 7 | | restricted company, that company ceases activity that | 8 | | designates the company to be an Iran-restricted company, a | 9 | | Sudan-restricted company, or a company that boycotts | 10 | | Israel, the company shall be removed from the list of | 11 | | restricted companies and the provisions of this Section | 12 | | shall cease to apply to it unless it resumes such | 13 | | activities. | 14 | | (f) The retirement system shall adhere to the following | 15 | | procedures for companies on the list of restricted companies: | 16 | | (1) The retirement system shall identify those | 17 | | companies on the list of restricted companies in which the | 18 | | retirement system owns direct holdings and indirect | 19 | | holdings. | 20 | | (2) The retirement system shall instruct its | 21 | | investment advisors to sell, redeem, divest, or withdraw | 22 | | all direct holdings of restricted companies from the | 23 | | retirement system's assets under management in an orderly | 24 | | and fiduciarily responsible manner within 12 months after | 25 | | the company's most recent appearance on the list of | 26 | | restricted companies. |
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| 1 | | (3) The retirement system may not acquire securities of | 2 | | restricted companies. | 3 | | (4) The provisions of this subsection (f) do not apply | 4 | | to the retirement system's indirect holdings or private | 5 | | market funds. The Illinois Investment Policy Board shall | 6 | | submit letters to the managers of those investment funds | 7 | | containing restricted companies requesting that they | 8 | | consider removing the companies from the fund or create a | 9 | | similar actively managed fund having indirect holdings | 10 | | devoid of the companies. If the manager creates a similar | 11 | | fund, the retirement system shall replace all applicable | 12 | | investments with investments in the similar fund in an | 13 | | expedited timeframe consistent with prudent investing | 14 | | standards. | 15 | | (g) Upon request, and at least annually, each retirement | 16 | | system shall provide the Illinois Investment Policy Board with | 17 | | information regarding investments sold, redeemed, divested, or | 18 | | withdrawn in compliance with this Section. | 19 | | (h) Notwithstanding any provision of this Section to the | 20 | | contrary, a retirement system may cease divesting from | 21 | | companies pursuant to subsection (f) if clear and convincing | 22 | | evidence shows that the value of investments in such companies | 23 | | becomes equal to or less than 0.5% of the market value of all | 24 | | assets under management by the retirement system. For any | 25 | | cessation of divestment authorized by this subsection (h), the | 26 | | retirement system shall provide a written notice to the |
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| 1 | | Illinois Investment Policy Board in advance of the cessation of | 2 | | divestment, setting forth the reasons and justification, | 3 | | supported by clear and convincing evidence, for its decision to | 4 | | cease divestment under subsection (f). | 5 | | (i) The cost associated with the activities of the Illinois | 6 | | Investment Policy Board shall be borne by the boards of each | 7 | | pension fund or investment board created under Article 15, 16, | 8 | | or 22A of this Code. | 9 | | (j) With respect to actions taken in compliance with this | 10 | | Section, including all good-faith determinations regarding | 11 | | companies as required by this Section, the retirement system | 12 | | and Illinois Investment Policy Board are exempt from any | 13 | | conflicting statutory or common law obligations, including any | 14 | | fiduciary duties under this Article and any obligations with | 15 | | respect to choice of asset managers, investment funds, or | 16 | | investments for the retirement system's securities portfolios. | 17 | | (k) It is not the intent of the General Assembly in | 18 | | enacting this amendatory Act of the 99th General Assembly to | 19 | | cause divestiture from any company based in the United States | 20 | | of America. The Illinois Investment Policy Board shall consider | 21 | | this intent when developing or reviewing the list of restricted | 22 | | companies. | 23 | | (l) If any provision of this amendatory Act of the 99th | 24 | | General Assembly or its application to any person or | 25 | | circumstance is held invalid, the invalidity of that provision | 26 | | or application does not affect other provisions or applications |
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| 1 | | of this amendatory Act of the 99th General Assembly that can be | 2 | | given effect without the invalid provision or application.
| 3 | | Section 99. Effective date. This Act takes effect upon | 4 | | becoming law.".
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