Illinois General Assembly - Full Text of SB1761
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Full Text of SB1761  99th General Assembly




State of Illinois
2015 and 2016


Introduced 2/20/2015, by Sen. Ira I. Silverstein


30 ILCS 500/50-36.5 new
40 ILCS 5/1-110.16 new

    Amends the Illinois Procurement Code. Prohibits a State agency from entering into a contract subject to the Code with a business that boycotts Israel. Amends the General Provisions Article of the Illinois Pension Code. Requires each of the 5 State-funded retirement systems (or the Illinois State Board of Investment where applicable) to make its best efforts to identify all companies that boycott Israel in which it has direct or indirect holdings and, under certain circumstances, to divest itself of holdings in those companies.

LRB099 10953 RPS 31300 b






SB1761LRB099 10953 RPS 31300 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 boycott Israel. Notwithstanding any other provision of
9this Code, on and after the effective date of this amendatory
10Act of the 99th General Assembly, a State agency shall not
11enter into a contract subject to this Code with a business that
12boycotts Israel. For the purposes of this Section, "boycott
13Israel" means engaging in actions that are politically
14motivated and are intended to penalize, inflict economic harm
15on, or otherwise limit commercial relations with the State of
16Israel or businesses based in the State of Israel or in
17territories controlled by the State of Israel.
18    Section 10. The Illinois Pension Code is amended by adding
19Section 1-110.16 as follows:
20    (40 ILCS 5/1-110.16 new)
21    Sec. 1-110.16. Transactions prohibited by retirement



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1systems; companies that boycott Israel.
2    (a) As used in this Section:
3    "Boycott Israel" means engaging in actions that are
4politically motivated and are intended to penalize, inflict
5economic harm on, or otherwise limit commercial relations with
6the State of Israel or companies based in the State of Israel
7or in territories controlled by the State of Israel.
8    "Company" means any sole proprietorship, organization,
9association, corporation, partnership, joint venture, limited
10partnership, limited liability partnership, limited liability
11company, or other entity or business association, including all
12wholly owned subsidiaries, majority-owned subsidiaries, parent
13companies, or affiliates of those entities or business
14associations, that exists for the purpose of making profit.
15    "Direct holdings" in a company means all securities of that
16company that are held directly by the retirement system or in
17an account or fund in which the retirement system owns all
18shares or interests.
19    "Indirect holdings" in a company means all securities of
20that company that are held in an account or fund, such as a
21mutual fund, managed by one or more persons not employed by the
22retirement system, in which the retirement system owns shares
23or interests together with other investors not subject to the
24provisions of this Section.
25    "Private market fund" means any private equity fund,
26private equity fund of funds, venture capital fund, hedge fund,



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1hedge fund of funds, real estate fund, or other investment
2vehicle that is not publicly traded.
3    "Retirement system" means a retirement system established
4under Article 2, 14, 15, 16, or 18 of this Code, or the
5Illinois State Board of Investment with respect to investments
6of the assets of any of those retirement systems under its
8    (b) Within 90 days after the effective date of this
9Section, each retirement system shall make its best efforts to
10identify all companies that boycott Israel in which the
11retirement system has direct or indirect holdings.
12    These efforts shall include the following, as appropriate
13in the retirement system's judgment:
14        (1) reviewing and relying on publicly available
15    information regarding companies that boycott Israel,
16    including information provided by nonprofit organizations,
17    research firms, and government entities;
18        (2) contacting asset managers contracted by the
19    retirement system that invest in companies that boycott
20    Israel; and
21        (3) contacting other institutional investors that have
22    divested from or engaged with companies that boycott
23    Israel.
24    The retirement system may retain an independent research
25firm to identify companies that boycott Israel in which the
26retirement system has direct or indirect holdings. By the first



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1meeting of the retirement system following the 90-day period
2described in this subsection (b), the retirement system shall
3assemble all of those identified companies into a list of
4companies that boycott Israel.
5    The retirement system shall annually update the list of
6companies that boycott Israel based on evolving information
7from, among other sources, those listed in this subsection (b).
8    (c) The retirement system shall adhere to the following
9procedures for companies on the list of companies that boycott
11        (1) The retirement system shall identify those
12    companies on the list of companies that boycott Israel in
13    which the retirement system owns direct or indirect
14    holdings.
15        (2) For each company newly identified in item (1) of
16    this subsection (c), the retirement system shall send a
17    written notice informing that company of its status and
18    that it may become subject to divestment by the retirement
19    system.
20        (3) If, within 90 days after the retirement system's
21    first engagement pursuant to this subsection (c) with a
22    company that boycotts Israel, that company ceases to
23    boycott Israel, the company shall be removed from the list
24    of companies that boycott Israel and the provisions of this
25    Section shall cease to apply to it unless it resumes its
26    boycott of Israel.



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1    (d) If, after 90 days following the retirement system's
2first engagement pursuant to subsection (c) with a company that
3boycotts Israel, the company continues to boycott Israel, the
4retirement system shall sell, redeem, divest, or withdraw all
5publicly traded securities of the company from the retirement
6system's assets under management within 12 months after the
7company's most recent appearance on the list of companies that
8boycott Israel.
9    (e) The retirement system may not acquire securities of
10companies that boycott Israel on the list of companies that
11boycott Israel.
12    (f) Each retirement system shall file a report with the
13Public Pension Division of the Department of Financial and
14Professional Regulation that includes the list of companies
15that boycott Israel within 30 days after the list is created.
16This report shall be made available to the public.
17    Each retirement system shall file an annual report with the
18Public Pension Division, which shall be made available to the
19public, that includes all of the following:
20        (1) a summary of correspondence with companies engaged
21    by the retirement system under items (2) and (3) of
22    subsection (c);
23        (2) all investments sold, redeemed, divested, or
24    withdrawn in compliance with subsection (d); and
25        (3) all prohibited investments under subsection (e).
26    (g) With respect to actions taken in compliance with this



SB1761- 6 -LRB099 10953 RPS 31300 b

1Act, including all good-faith determinations regarding
2companies as required by this Act, the retirement system is
3exempt from any conflicting statutory or common law
4obligations, including any fiduciary duties under this Article
5and any obligations with respect to choice of asset managers,
6investment funds, or investments for the retirement system's
7securities portfolios.
8    (h) If any provision of this Section or its application to
9any person or circumstance is held invalid, the invalidity of
10that provision or application does not affect other provisions
11or applications of this Section that can be given effect
12without the invalid provision or application.