Full Text of HB0163 100th General Assembly
HB0163ham001 100TH GENERAL ASSEMBLY | Rep. Michael Halpin Filed: 3/14/2017
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| 1 | | AMENDMENT TO HOUSE BILL 163
| 2 | | AMENDMENT NO. ______. Amend House Bill 163 by replacing | 3 | | everything after the enacting clause with the following:
| 4 | | "Section 3. The Freedom of Information Act is amended by | 5 | | changing Section 7 as follows: | 6 | | (5 ILCS 140/7) (from Ch. 116, par. 207) | 7 | | Sec. 7. Exemptions.
| 8 | | (1) When a request is made to inspect or copy a public | 9 | | record that contains information that is exempt from disclosure | 10 | | under this Section, but also contains information that is not | 11 | | exempt from disclosure, the public body may elect to redact the | 12 | | information that is exempt. The public body shall make the | 13 | | remaining information available for inspection and copying. | 14 | | Subject to this requirement, the following shall be exempt from | 15 | | inspection and copying:
| 16 | | (a) Information specifically prohibited from |
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| 1 | | disclosure by federal or
State law or rules and regulations | 2 | | implementing federal or State law.
| 3 | | (b) Private information, unless disclosure is required | 4 | | by another provision of this Act, a State or federal law or | 5 | | a court order. | 6 | | (b-5) Files, documents, and other data or databases | 7 | | maintained by one or more law enforcement agencies and | 8 | | specifically designed to provide information to one or more | 9 | | law enforcement agencies regarding the physical or mental | 10 | | status of one or more individual subjects. | 11 | | (c) Personal information contained within public | 12 | | records, the disclosure of which would constitute a clearly
| 13 | | unwarranted invasion of personal privacy, unless the | 14 | | disclosure is
consented to in writing by the individual | 15 | | subjects of the information. "Unwarranted invasion of | 16 | | personal privacy" means the disclosure of information that | 17 | | is highly personal or objectionable to a reasonable person | 18 | | and in which the subject's right to privacy outweighs any | 19 | | legitimate public interest in obtaining the information. | 20 | | The
disclosure of information that bears on the public | 21 | | duties of public
employees and officials shall not be | 22 | | considered an invasion of personal
privacy.
| 23 | | (d) Records in the possession of any public body | 24 | | created in the course of administrative enforcement
| 25 | | proceedings, and any law enforcement or correctional | 26 | | agency for
law enforcement purposes,
but only to the extent |
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| 1 | | that disclosure would:
| 2 | | (i) interfere with pending or actually and | 3 | | reasonably contemplated
law enforcement proceedings | 4 | | conducted by any law enforcement or correctional
| 5 | | agency that is the recipient of the request;
| 6 | | (ii) interfere with active administrative | 7 | | enforcement proceedings
conducted by the public body | 8 | | that is the recipient of the request;
| 9 | | (iii) create a substantial likelihood that a | 10 | | person will be deprived of a fair trial or an impartial | 11 | | hearing;
| 12 | | (iv) unavoidably disclose the identity of a | 13 | | confidential source, confidential information | 14 | | furnished only by the confidential source, or persons | 15 | | who file complaints with or provide information to | 16 | | administrative, investigative, law enforcement, or | 17 | | penal agencies; except that the identities of | 18 | | witnesses to traffic accidents, traffic accident | 19 | | reports, and rescue reports shall be provided by | 20 | | agencies of local government, except when disclosure | 21 | | would interfere with an active criminal investigation | 22 | | conducted by the agency that is the recipient of the | 23 | | request;
| 24 | | (v) disclose unique or specialized investigative | 25 | | techniques other than
those generally used and known or | 26 | | disclose internal documents of
correctional agencies |
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| 1 | | related to detection, observation or investigation of
| 2 | | incidents of crime or misconduct, and disclosure would | 3 | | result in demonstrable harm to the agency or public | 4 | | body that is the recipient of the request;
| 5 | | (vi) endanger the life or physical safety of law | 6 | | enforcement personnel
or any other person; or
| 7 | | (vii) obstruct an ongoing criminal investigation | 8 | | by the agency that is the recipient of the request.
| 9 | | (d-5) A law enforcement record created for law | 10 | | enforcement purposes and contained in a shared electronic | 11 | | record management system if the law enforcement agency that | 12 | | is the recipient of the request did not create the record, | 13 | | did not participate in or have a role in any of the events | 14 | | which are the subject of the record, and only has access to | 15 | | the record through the shared electronic record management | 16 | | system. | 17 | | (e) Records that relate to or affect the security of | 18 | | correctional
institutions and detention facilities.
| 19 | | (e-5) Records requested by persons committed to the | 20 | | Department of Corrections if those materials are available | 21 | | in the library of the correctional facility where the | 22 | | inmate is confined. | 23 | | (e-6) Records requested by persons committed to the | 24 | | Department of Corrections if those materials include | 25 | | records from staff members' personnel files, staff | 26 | | rosters, or other staffing assignment information. |
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| 1 | | (e-7) Records requested by persons committed to the | 2 | | Department of Corrections if those materials are available | 3 | | through an administrative request to the Department of | 4 | | Corrections. | 5 | | (f) Preliminary drafts, notes, recommendations, | 6 | | memoranda and other
records in which opinions are | 7 | | expressed, or policies or actions are
formulated, except | 8 | | that a specific record or relevant portion of a
record | 9 | | shall not be exempt when the record is publicly cited
and | 10 | | identified by the head of the public body. The exemption | 11 | | provided in
this paragraph (f) extends to all those records | 12 | | of officers and agencies
of the General Assembly that | 13 | | pertain to the preparation of legislative
documents.
| 14 | | (g) Trade secrets and commercial or financial | 15 | | information obtained from
a person or business where the | 16 | | trade secrets or commercial or financial information are | 17 | | furnished under a claim that they are
proprietary, | 18 | | privileged or confidential, and that disclosure of the | 19 | | trade
secrets or commercial or financial information would | 20 | | cause competitive harm to the person or business, and only | 21 | | insofar as the claim directly applies to the records | 22 | | requested. | 23 | | The information included under this exemption includes | 24 | | all trade secrets and commercial or financial information | 25 | | obtained by a public body, including a public pension fund, | 26 | | from a private equity fund or a privately held company |
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| 1 | | within the investment portfolio of a private equity fund as | 2 | | a result of either investing or evaluating a potential | 3 | | investment of public funds in a private equity fund. The | 4 | | exemption contained in this item does not apply to the | 5 | | aggregate financial performance information of a private | 6 | | equity fund, nor to the identity of the fund's managers or | 7 | | general partners. The exemption contained in this item does | 8 | | not apply to the identity of a privately held company | 9 | | within the investment portfolio of a private equity fund, | 10 | | unless the disclosure of the identity of a privately held | 11 | | company may cause competitive harm. Neither the exemption | 12 | | contained in this item, nor any other exemption under this | 13 | | Act, applies to information that is required to be | 14 | | disclosed under Section 1-113.17a of the Illinois Pension | 15 | | Code or is declared in that Section to be a public record. | 16 | | Nothing contained in this
paragraph (g) shall be | 17 | | construed to prevent a person or business from
consenting | 18 | | to disclosure.
| 19 | | (h) Proposals and bids for any contract, grant, or | 20 | | agreement, including
information which if it were | 21 | | disclosed would frustrate procurement or give
an advantage | 22 | | to any person proposing to enter into a contractor | 23 | | agreement
with the body, until an award or final selection | 24 | | is made. Information
prepared by or for the body in | 25 | | preparation of a bid solicitation shall be
exempt until an | 26 | | award or final selection is made.
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| 1 | | (i) Valuable formulae,
computer geographic systems,
| 2 | | designs, drawings and research data obtained or
produced by | 3 | | any public body when disclosure could reasonably be | 4 | | expected to
produce private gain or public loss.
The | 5 | | exemption for "computer geographic systems" provided in | 6 | | this paragraph
(i) does not extend to requests made by news | 7 | | media as defined in Section 2 of
this Act when the | 8 | | requested information is not otherwise exempt and the only
| 9 | | purpose of the request is to access and disseminate | 10 | | information regarding the
health, safety, welfare, or | 11 | | legal rights of the general public.
| 12 | | (j) The following information pertaining to | 13 | | educational matters: | 14 | | (i) test questions, scoring keys and other | 15 | | examination data used to
administer an academic | 16 | | examination;
| 17 | | (ii) information received by a primary or | 18 | | secondary school, college, or university under its | 19 | | procedures for the evaluation of faculty members by | 20 | | their academic peers; | 21 | | (iii) information concerning a school or | 22 | | university's adjudication of student disciplinary | 23 | | cases, but only to the extent that disclosure would | 24 | | unavoidably reveal the identity of the student; and | 25 | | (iv) course materials or research materials used | 26 | | by faculty members. |
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| 1 | | (k) Architects' plans, engineers' technical | 2 | | submissions, and
other
construction related technical | 3 | | documents for
projects not constructed or developed in | 4 | | whole or in part with public funds
and the same for | 5 | | projects constructed or developed with public funds, | 6 | | including but not limited to power generating and | 7 | | distribution stations and other transmission and | 8 | | distribution facilities, water treatment facilities, | 9 | | airport facilities, sport stadiums, convention centers, | 10 | | and all government owned, operated, or occupied buildings, | 11 | | but
only to the extent
that disclosure would compromise | 12 | | security.
| 13 | | (l) Minutes of meetings of public bodies closed to the
| 14 | | public as provided in the Open Meetings Act until the | 15 | | public body
makes the minutes available to the public under | 16 | | Section 2.06 of the Open
Meetings Act.
| 17 | | (m) Communications between a public body and an | 18 | | attorney or auditor
representing the public body that would | 19 | | not be subject to discovery in
litigation, and materials | 20 | | prepared or compiled by or for a public body in
| 21 | | anticipation of a criminal, civil or administrative | 22 | | proceeding upon the
request of an attorney advising the | 23 | | public body, and materials prepared or
compiled with | 24 | | respect to internal audits of public bodies.
| 25 | | (n) Records relating to a public body's adjudication of | 26 | | employee grievances or disciplinary cases; however, this |
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| 1 | | exemption shall not extend to the final outcome of cases in | 2 | | which discipline is imposed.
| 3 | | (o) Administrative or technical information associated | 4 | | with automated
data processing operations, including but | 5 | | not limited to software,
operating protocols, computer | 6 | | program abstracts, file layouts, source
listings, object | 7 | | modules, load modules, user guides, documentation
| 8 | | pertaining to all logical and physical design of | 9 | | computerized systems,
employee manuals, and any other | 10 | | information that, if disclosed, would
jeopardize the | 11 | | security of the system or its data or the security of
| 12 | | materials exempt under this Section.
| 13 | | (p) Records relating to collective negotiating matters
| 14 | | between public bodies and their employees or | 15 | | representatives, except that
any final contract or | 16 | | agreement shall be subject to inspection and copying.
| 17 | | (q) Test questions, scoring keys, and other | 18 | | examination data used to determine the qualifications of an | 19 | | applicant for a license or employment.
| 20 | | (r) The records, documents, and information relating | 21 | | to real estate
purchase negotiations until those | 22 | | negotiations have been completed or
otherwise terminated. | 23 | | With regard to a parcel involved in a pending or
actually | 24 | | and reasonably contemplated eminent domain proceeding | 25 | | under the Eminent Domain Act, records, documents and
| 26 | | information relating to that parcel shall be exempt except |
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| 1 | | as may be
allowed under discovery rules adopted by the | 2 | | Illinois Supreme Court. The
records, documents and | 3 | | information relating to a real estate sale shall be
exempt | 4 | | until a sale is consummated.
| 5 | | (s) Any and all proprietary information and records | 6 | | related to the
operation of an intergovernmental risk | 7 | | management association or
self-insurance pool or jointly | 8 | | self-administered health and accident
cooperative or pool.
| 9 | | Insurance or self insurance (including any | 10 | | intergovernmental risk management association or self | 11 | | insurance pool) claims, loss or risk management | 12 | | information, records, data, advice or communications.
| 13 | | (t) Information contained in or related to | 14 | | examination, operating, or
condition reports prepared by, | 15 | | on behalf of, or for the use of a public
body responsible | 16 | | for the regulation or supervision of financial
| 17 | | institutions or insurance companies, unless disclosure is | 18 | | otherwise
required by State law.
| 19 | | (u) Information that would disclose
or might lead to | 20 | | the disclosure of
secret or confidential information, | 21 | | codes, algorithms, programs, or private
keys intended to be | 22 | | used to create electronic or digital signatures under the
| 23 | | Electronic Commerce Security Act.
| 24 | | (v) Vulnerability assessments, security measures, and | 25 | | response policies
or plans that are designed to identify, | 26 | | prevent, or respond to potential
attacks upon a community's |
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| 1 | | population or systems, facilities, or installations,
the | 2 | | destruction or contamination of which would constitute a | 3 | | clear and present
danger to the health or safety of the | 4 | | community, but only to the extent that
disclosure could | 5 | | reasonably be expected to jeopardize the effectiveness of | 6 | | the
measures or the safety of the personnel who implement | 7 | | them or the public.
Information exempt under this item may | 8 | | include such things as details
pertaining to the | 9 | | mobilization or deployment of personnel or equipment, to | 10 | | the
operation of communication systems or protocols, or to | 11 | | tactical operations.
| 12 | | (w) (Blank). | 13 | | (x) Maps and other records regarding the location or | 14 | | security of generation, transmission, distribution, | 15 | | storage, gathering,
treatment, or switching facilities | 16 | | owned by a utility, by a power generator, or by the | 17 | | Illinois Power Agency.
| 18 | | (y) Information contained in or related to proposals, | 19 | | bids, or negotiations related to electric power | 20 | | procurement under Section 1-75 of the Illinois Power Agency | 21 | | Act and Section 16-111.5 of the Public Utilities Act that | 22 | | is determined to be confidential and proprietary by the | 23 | | Illinois Power Agency or by the Illinois Commerce | 24 | | Commission.
| 25 | | (z) Information about students exempted from | 26 | | disclosure under Sections 10-20.38 or 34-18.29 of the |
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| 1 | | School Code, and information about undergraduate students | 2 | | enrolled at an institution of higher education exempted | 3 | | from disclosure under Section 25 of the Illinois Credit | 4 | | Card Marketing Act of 2009. | 5 | | (aa) Information the disclosure of which is
exempted | 6 | | under the Viatical Settlements Act of 2009.
| 7 | | (bb) Records and information provided to a mortality | 8 | | review team and records maintained by a mortality review | 9 | | team appointed under the Department of Juvenile Justice | 10 | | Mortality Review Team Act. | 11 | | (cc) Information regarding interments, entombments, or | 12 | | inurnments of human remains that are submitted to the | 13 | | Cemetery Oversight Database under the Cemetery Care Act or | 14 | | the Cemetery Oversight Act, whichever is applicable. | 15 | | (dd) Correspondence and records (i) that may not be | 16 | | disclosed under Section 11-9 of the Illinois Public Aid | 17 | | Code or (ii) that pertain to appeals under Section 11-8 of | 18 | | the Illinois Public Aid Code. | 19 | | (ee) The names, addresses, or other personal | 20 | | information of persons who are minors and are also | 21 | | participants and registrants in programs of park | 22 | | districts, forest preserve districts, conservation | 23 | | districts, recreation agencies, and special recreation | 24 | | associations. | 25 | | (ff) The names, addresses, or other personal | 26 | | information of participants and registrants in programs of |
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| 1 | | park districts, forest preserve districts, conservation | 2 | | districts, recreation agencies, and special recreation | 3 | | associations where such programs are targeted primarily to | 4 | | minors. | 5 | | (gg) Confidential information described in Section | 6 | | 1-100 of the Illinois Independent Tax Tribunal Act of 2012. | 7 | | (hh) The report submitted to the State Board of | 8 | | Education by the School Security and Standards Task Force | 9 | | under item (8) of subsection (d) of Section 2-3.160 of the | 10 | | School Code and any information contained in that report. | 11 | | (ii) Records requested by persons committed to or | 12 | | detained by the Department of Human Services under the | 13 | | Sexually Violent Persons Commitment Act or committed to the | 14 | | Department of Corrections under the Sexually Dangerous | 15 | | Persons Act if those materials: (i) are available in the | 16 | | library of the facility where the individual is confined; | 17 | | (ii) include records from staff members' personnel files, | 18 | | staff rosters, or other staffing assignment information; | 19 | | or (iii) are available through an administrative request to | 20 | | the Department of Human Services or the Department of | 21 | | Corrections. | 22 | | (jj) Confidential information described in Section | 23 | | 5-535 of the Civil Administrative Code of Illinois. | 24 | | (1.5) Any information exempt from disclosure under the | 25 | | Judicial Privacy Act shall be redacted from public records | 26 | | prior to disclosure under this Act. |
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| 1 | | (2) A public record that is not in the possession of a | 2 | | public body but is in the possession of a party with whom the | 3 | | agency has contracted to perform a governmental function on | 4 | | behalf of the public body, and that directly relates to the | 5 | | governmental function and is not otherwise exempt under this | 6 | | Act, shall be considered a public record of the public body, | 7 | | for purposes of this Act. | 8 | | (3) This Section does not authorize withholding of | 9 | | information or limit the
availability of records to the public, | 10 | | except as stated in this Section or
otherwise provided in this | 11 | | Act.
| 12 | | (Source: P.A. 98-463, eff. 8-16-13; 98-578, eff. 8-27-13; | 13 | | 98-695, eff. 7-3-14; 99-298, eff. 8-6-15; 99-346, eff. 1-1-16; | 14 | | 99-642, eff. 7-28-16; revised 10-25-16.) | 15 | | Section 5. The Illinois Pension Code is amended by adding | 16 | | Sections 1-113.17, 1-113.17a, 1-113.17b, and 1-113.17c as | 17 | | follows: | 18 | | (40 ILCS 5/1-113.17 new) | 19 | | Sec. 1-113.17. Investment transparency; definitions. As | 20 | | used in this Section and Sections 1-113.17a, 1-113.17b, and | 21 | | 1-113.17c: | 22 | | (a) "Affiliate" means any person directly or indirectly | 23 | | controlling or controlled by, or under direct or indirect | 24 | | common control with, another person. |
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| 1 | | (a-5) "Alternative investment fund" means a private equity | 2 | | fund, hedge fund, or absolute return fund. | 3 | | (b) "Board" or "public retirement system board" means the | 4 | | board of trustees of a public retirement system and includes | 5 | | the Illinois State Board of Investment established under | 6 | | Article 22A of this Code. | 7 | | (c) "External manager" means either of the following: | 8 | | (1) A person who manages an alternative investment fund | 9 | | and who offers or sells, or has offered or sold, an | 10 | | ownership interest in the alternative investment fund to a | 11 | | board. | 12 | | (2) A general partner, managing member entity, fund | 13 | | manager, fund adviser, or other similar person or entity | 14 | | with decision-making authority over an alternative | 15 | | investment fund. | 16 | | (d) "External manager group" means (1) the external | 17 | | manager, (2) its affiliates, (3) any other parties described in | 18 | | the external manager's marketing materials for the relevant | 19 | | alternative investment fund as providing services to or on | 20 | | behalf of portfolio holdings, and (4) any other parties | 21 | | described in the external manager's affiliated adviser's SEC | 22 | | Form ADV filing as receiving portfolio holding fees or | 23 | | portfolio holding other compensation. "External manager group" | 24 | | does not include the affiliated alternative investment fund in | 25 | | which the public retirement system is an investor, nor does it | 26 | | include an alternative investment fund used to effectuate |
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| 1 | | investments of the affiliated fund in which the public | 2 | | retirement system is an investor. | 3 | | (e) "Marketing materials" means (1) a prospectus, (2) a | 4 | | private placement memorandum, (3) a prospective investor | 5 | | presentation, (4) a due diligence questionnaire, but only if | 6 | | the questions are authored by an external manager, or (5) any | 7 | | other written material provided by an external manager for the | 8 | | purpose of soliciting a commitment to an alternative investment | 9 | | fund. | 10 | | (f) "New agreement" means an agreement that is proposed or | 11 | | executed after February 1, 2019, and includes any modification | 12 | | to or amendment of such an agreement that modifies or alters | 13 | | any of the provisions required to be disclosed under Section | 14 | | 1-113.17a or 1-113.17b. "New agreement" also means any | 15 | | subsequent agreement that implements, memorializes, or | 16 | | provides detail about such an agreement. | 17 | | (g) "Person" means an individual, corporation, | 18 | | partnership, limited partnership, limited liability company, | 19 | | or association, either domestic or foreign. | 20 | | (h) "Portfolio holding" means any business, partnership, | 21 | | real property, or other business entity or asset in which an | 22 | | alternative investment fund has, at any time, held either an | 23 | | interest in the securities thereof or a real property interest | 24 | | in, or has acted as a lender to, the entity or asset. | 25 | | (i) "Portfolio holding fee" means the total payment | 26 | | obligation of a portfolio holding, regardless of whether it is |
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| 1 | | actually paid or accrued, and regardless of whether the payment | 2 | | obligation is satisfied in cash, securities, or other | 3 | | consideration, and regardless of whether it is incurred as | 4 | | compensation for services provided or as reimbursement for | 5 | | expenses incurred. | 6 | | (j) "Private equity fund" means a pooled investment entity | 7 | | that is, or holds itself out as being, engaged primarily, or | 8 | | proposes to engage primarily, in investment strategies | 9 | | involving equity or debt financings that are provided for | 10 | | purchasing or expanding private or public companies, or for | 11 | | related purposes such as financing for capital, research and | 12 | | development, introduction of a product or process into the | 13 | | marketplace, or similar needs requiring risk capital. This | 14 | | includes, but is not limited to, financing classified as | 15 | | venture capital, mezzanine, buyout, or growth funds. | 16 | | (k) "Public retirement system" means a pension fund or | 17 | | retirement system subject to Article 5, 6, 7, 8, 9, 11, 12, 13, | 18 | | 15, 16, or 17 of this Code, and includes the Illinois State | 19 | | Board of Investment established under Article 22A of this Code. | 20 | | (l) "Task Force" means the Investment Transparency Task | 21 | | Force created under Section 1-113.17c of this Code. | 22 | | (40 ILCS 5/1-113.17a new) | 23 | | Sec. 1-113.17a. Investment transparency; disclosure of | 24 | | alternative investment fund agreements. | 25 | | (a) The definitions in Section 1-113.17 of this Code apply |
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| 1 | | to this Section. | 2 | | (b) Within 90 days after entering into a new agreement to | 3 | | invest in an alternative investment fund, a public retirement | 4 | | system must disclose, in the manner provided under this | 5 | | Section, the existence of the agreement and all of the | 6 | | following parts and provisions of the agreement: | 7 | | (1) All management fee waiver provisions, including, | 8 | | but not limited to, provisions that permit the external | 9 | | manager or general partner to waive fees, or that specify | 10 | | the mechanics of the fee waiver or its repayment, or that | 11 | | specify the magnitude of the fee waiver, or that are | 12 | | necessary to understand how the fee waiver works, and all | 13 | | defined terms related to or affecting the fee waiver. | 14 | | (2) All indemnification provisions, including, but not | 15 | | limited to, provisions that require the alternative | 16 | | investment fund or its investors to indemnify the external | 17 | | manager or general partner, or any of its affiliates, for | 18 | | settlements or judgments paid, and including all | 19 | | provisions necessary to understand how the indemnification | 20 | | works and all defined terms related to or affecting | 21 | | indemnification. | 22 | | (3) All clawback provisions, including, but not | 23 | | limited to, provisions that allow the external manager or | 24 | | general partner to pay back an amount less than the full | 25 | | cost of the overpayment received by the manager, and | 26 | | including all provisions necessary to understand how the |
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| 1 | | clawback works and all defined terms related to or | 2 | | affecting clawbacks. | 3 | | (4) The cover page and signature block of the | 4 | | agreement. | 5 | | However, in the case of a new agreement that consists of a | 6 | | modification of or amendment to a previous new agreement for | 7 | | which the disclosures required under this subsection have | 8 | | already been made, it is sufficient for the public retirement | 9 | | system (i) to identify the previous disclosures and disclose | 10 | | only the parts and provisions of the modification of or | 11 | | amendment to the agreement that modify, alter, or affect any of | 12 | | the provisions previously disclosed under this subsection or | 13 | | (ii) to make and disclose a finding that the modification or | 14 | | amendment does not modify, alter, or affect any of the | 15 | | provisions previously disclosed under this subsection, | 16 | | whichever is applicable. | 17 | | (c) The public retirement system shall make the disclosures | 18 | | required under subsection (b) by doing all of the following: | 19 | | (1) filing a copy of the required material with the | 20 | | Public Pension Division of the Illinois Department of | 21 | | Insurance; | 22 | | (2) filing a copy of the required material with the | 23 | | Illinois Secretary of State; and | 24 | | (3) posting and maintaining the required material on | 25 | | the public retirement system's website. | 26 | | (d) A new agreement shall not be deemed to be violated or |
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| 1 | | made invalid by the public retirement system's good faith | 2 | | effort to make the disclosures required under subsection (b) of | 3 | | this Section, nor due to harmless or inadvertent failure by the | 4 | | public retirement system to correctly include or identify a | 5 | | component of a required disclosure. | 6 | | (e) The following are public records and are subject to | 7 | | disclosure under the Freedom of Information Act: | 8 | | (1) All of the material required to be disclosed under | 9 | | subsection (b) of this Section. | 10 | | (2) Any amounts paid in indemnification and any amounts | 11 | | deducted from payments owed by the general partner or | 12 | | external manager under an agreement establishing or | 13 | | providing for participation in an alternative investment | 14 | | fund by a public retirement system, and any documents | 15 | | submitted to a public retirement system justifying the | 16 | | demand for payment relating to the indemnification. | 17 | | (3) The cover page and a legible copy of the executed | 18 | | signature block of any new agreement to establish or | 19 | | participate in an alternative investment fund by a public | 20 | | retirement system. | 21 | | (f) If a public retirement system adopts and implements the | 22 | | recommendations of the Task Force that apply to this Section, | 23 | | and those recommendations are not rejected by the General | 24 | | Assembly under subsection (f) of Section 1-113.17c, then | 25 | | disclosures made in conformance with those recommendations | 26 | | shall constitute compliance with the disclosure requirements |
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| 1 | | of this Section. | 2 | | (40 ILCS 5/1-113.17b new) | 3 | | Sec. 1-113.17b. Investment transparency; disclosure of | 4 | | certain investment fees. | 5 | | (a) The definitions in Section 1-113.17 of this Code apply | 6 | | to this Section. For the purposes of this Section, "carried | 7 | | interest" means a share of the profits of an alternative | 8 | | investment fund that is paid, accrued, or due to the general | 9 | | partner or the external manager or their affiliates. | 10 | | (b) This Section applies to any new agreement that a public | 11 | | retirement system enters into in order to establish or | 12 | | participate in an alternative investment fund. A public | 13 | | retirement system shall not enter into such new agreement | 14 | | without a written undertaking by the alternative investment | 15 | | fund external managers and general partners that they will | 16 | | comply with this Section and the requirements of the public | 17 | | retirement system under subsection (c), or under subsection (e) | 18 | | if applicable. | 19 | | (c) Every public retirement system shall require its | 20 | | alternative investment fund external managers and general | 21 | | partners to make the following disclosures annually, in a | 22 | | manner and form prescribed by the system, in regard to each | 23 | | alternative investment fund: | 24 | | (1) The fees and expenses that the public retirement | 25 | | system pays directly to the alternative investment fund, or |
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| 1 | | to the alternative investment fund external manager or | 2 | | general partner. | 3 | | (2) The public retirement system's share of all fees | 4 | | and expenses not included in paragraph (1), including | 5 | | carried interest, that are paid or allocated from the | 6 | | alternative investment fund to the external manager or | 7 | | general partners, or that are deducted from payments owed | 8 | | from the external manager or general partners to the | 9 | | alternative investment fund. | 10 | | (3) The amount of all management fee waivers made by | 11 | | the alternative investment fund external managers or | 12 | | general partners. | 13 | | (4) The total amount of portfolio holding fees incurred | 14 | | by each portfolio holding of the alternative investment | 15 | | fund as payment to any person who is a member of the | 16 | | external manager group. | 17 | | An alternative investment fund external manager or general | 18 | | partner may provide the public retirement system with a | 19 | | completed reporting template developed by the Institutional | 20 | | Limited Partners Association for the relevant category of | 21 | | investment; doing so constitutes compliance with that external | 22 | | manager or general partner's annual disclosure requirements | 23 | | under this subsection for the year covered in the completed | 24 | | template. | 25 | | (d) A public retirement system shall make the information | 26 | | received under subsection (c) available by: |
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| 1 | | (1) filing a copy of the received material with the | 2 | | Public Pension Division of the Illinois Department of | 3 | | Insurance; and | 4 | | (2) posting and maintaining the received information | 5 | | on the public retirement system's website, together with | 6 | | sufficient identifying and explanatory material to | 7 | | facilitate access and understanding by the public. | 8 | | (e) If a public retirement system adopts and implements the | 9 | | recommendations of the Task Force that apply to this Section, | 10 | | and those recommendations are not rejected by the General | 11 | | Assembly under subsection (f) of Section 1-113.17c, then | 12 | | disclosures made in conformance with those recommendations | 13 | | shall constitute compliance with the disclosure requirements | 14 | | of this Section. | 15 | | (40 ILCS 5/1-113.17c new) | 16 | | Sec. 1-113.17c. Investment Transparency Task Force. | 17 | | (a) The definitions in Section 1-113.17 of this Code apply | 18 | | to this Section. | 19 | | (b) There is created the Investment Transparency Task | 20 | | Force. It is the purpose of the Task Force to study, identify | 21 | | best available practices, and make recommendations relating | 22 | | to: (1) disclosure of, and best practices related to, the | 23 | | portions of limited partnership agreements addressing | 24 | | indemnification provisions, clawback provisions, and | 25 | | management fee waivers, which are the subject of Section |
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| 1 | | 1-113.17a; and (2) disclosure of fees and expenses incurred, | 2 | | including related fee waivers and portfolio holding fees, which | 3 | | are the subject of Section 1-113.17b. | 4 | | (c) The Task Force shall consist of the following persons: | 5 | | (1) The executive director (or his or her designee) of | 6 | | each public retirement system subject to Article 5, 6, 7, | 7 | | 8, 9, 11, 12, 13, 15, 16, or 17 of this Code, and the | 8 | | director of the Illinois State Board of Investment | 9 | | established under Article 22A of this Code (or the | 10 | | director's designee). | 11 | | (2) One person appointed by each of the 4 Legislative | 12 | | Leaders. | 13 | | (3) The State Treasurer, or his or her designee. | 14 | | (4) One person representing the interests of external | 15 | | managers, appointed by the State Treasurer. | 16 | | (5) One person representing the interests of the | 17 | | beneficiaries of public retirement systems, appointed by | 18 | | the State Treasurer. | 19 | | (6) One person representing the interests of Illinois | 20 | | taxpayers, appointed by the State Treasurer. | 21 | | All members shall be appointed for the life of the Task | 22 | | Force. In the case of a resignation or other vacancy occurring | 23 | | among persons appointed under item (2), (3), (4), (5), or (6), | 24 | | a replacement member may be appointed by the applicable | 25 | | appointing authority. | 26 | | (d) Members of the Task Force shall serve without |
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| 1 | | compensation, but may be reimbursed for their necessary | 2 | | expenses from funds lawfully available for that purpose. | 3 | | (e) No later than January 15, 2018, the Task Force shall | 4 | | report to the General Assembly and the public retirement | 5 | | systems its findings and recommendations, which must be adopted | 6 | | by a majority of the members appointed. The report of the Task | 7 | | Force shall separate and clearly designate the portions of its | 8 | | findings and recommendations that relate (i) to Section | 9 | | 1-113.17a and (ii) to Section 1-113.17b. In each portion, the | 10 | | findings and recommendations shall be prepared and presented in | 11 | | a form that can be readily identified, adopted, and implemented | 12 | | by any public retirement system wishing to do so. Copies of the | 13 | | report shall be made available to the public as provided by | 14 | | law. | 15 | | (f) The 100th General Assembly may, by joint resolution, | 16 | | reject the portion of the report relating to Section 1-113.17a, | 17 | | the portion of the report relating to Section 1-113.17b, or | 18 | | both. Any part of the report that is not so rejected shall be | 19 | | deemed to have been accepted by the General Assembly as | 20 | | consistent with the public policy of the State. | 21 | | (g) A public retirement system may adopt and implement any | 22 | | of the recommendations of the Task Force at any time. However, | 23 | | if one or both portions of the report are rejected by the | 24 | | General Assembly under subsection (f), the public retirement | 25 | | system shall adjust its implementation of the rejected | 26 | | provision as necessary to comply with the requirements of |
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| 1 | | Section 1-113.17a or 1-113.17b or both, as applicable.
| 2 | | Section 99. Effective date. This Act takes effect upon | 3 | | becoming law.".
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