Full Text of HB1293 102nd General Assembly
HB1293sam001 102ND GENERAL ASSEMBLY | Sen. Don Harmon Filed: 11/15/2022
| | 10200HB1293sam001 | | LRB102 03303 RPS 41682 a |
|
| 1 | | AMENDMENT TO HOUSE BILL 1293
| 2 | | AMENDMENT NO. ______. Amend House Bill 1293 by replacing | 3 | | everything after the enacting clause with the following:
| 4 | | "Article 1. | 5 | | Section 1-1. Findings. | 6 | | (a) The General Assembly finds that: | 7 | | (1) Russia launched an unprecedented military assault | 8 | | on Ukraine that has left many dead, and the fighting in | 9 | | Ukraine appears to be some of the worst conventional | 10 | | warfare Europe has seen since World War II and the | 11 | | conflicts in the Balkans in the 1990s; | 12 | | (2) Western leaders have been united in their swift | 13 | | and strong condemnation of Russia's military action; | 14 | | (3) President Biden has stated that Russian President | 15 | | Putin had "committed an assault on the very principles | 16 | | that uphold the global peace", and the United States has, |
| | | 10200HB1293sam001 | - 2 - | LRB102 03303 RPS 41682 a |
|
| 1 | | as a result, taken steps to impose harsh, new sanctions | 2 | | that are intended to punish President Putin for his | 3 | | actions; | 4 | | (4) Secretary of State Blinken has indicated that | 5 | | there are credible reports that Russia has engaged in | 6 | | actions during its military assault on Ukraine that | 7 | | constitute war crimes under international law; | 8 | | (5) Russia has used, during its military assault on | 9 | | Ukraine, weapons that have been banned by many countries, | 10 | | including cluster munitions; | 11 | | (6) Russia has conducted direct attacks on major | 12 | | nuclear power facilities in Ukraine, which could lead to | 13 | | disaster and the spread of radioactive contamination | 14 | | across Ukraine and Europe; | 15 | | (7) the United Nations has estimated that more than | 16 | | 14,000,000 Ukrainians have already been displaced within | 17 | | the country and more than 7,000,000 have left the country | 18 | | as a result of the Russian invasion; | 19 | | (8) the international community is making preparations | 20 | | to meet the humanitarian needs of those refugees who are | 21 | | displaced by this conflict; | 22 | | (9) Central Europe is welcoming Ukrainians, but the | 23 | | countries in that region are not currently equipped to | 24 | | handle the volume of refugees that are anticipated to | 25 | | arrive at their borders in the coming weeks, and European | 26 | | and U.S. leadership must help build that capacity; and |
| | | 10200HB1293sam001 | - 3 - | LRB102 03303 RPS 41682 a |
|
| 1 | | (10) Illinois is a welcoming state to refugees and | 2 | | immigrants and home to a robust community of Ukrainian | 3 | | immigrants and Ukrainian descendants, many of whom live in | 4 | | Chicago's Ukrainian Village neighborhood. | 5 | | (b) For these reasons, the General Assembly urges: | 6 | | (1) the pension funds and retirement systems | 7 | | established under the Illinois Pension Code to divest | 8 | | their holdings in any companies that are domiciled in | 9 | | Russia or Belarus and that are on the list of restricted | 10 | | companies developed by the Illinois Investment Policy | 11 | | Board; | 12 | | (2) all municipalities to reconsider any sister-city | 13 | | relationships they may have with cities in Russia; and | 14 | | (3) the United States Department of State to resettle | 15 | | Ukrainian refugees in Illinois.
| 16 | | Article 5. | 17 | | Section 5-1. Short title. This Article may be cited as the | 18 | | Money Laundering in Real Estate Task Force Act. References in | 19 | | this Article to "this Act" mean this Article. | 20 | | Section 5-3. Findings. The General Assembly finds and | 21 | | declares the following:
| 22 | | (1) the United States Department of Treasury's | 23 | | Financial Crimes Enforcement Network found, in 2017, that |
| | | 10200HB1293sam001 | - 4 - | LRB102 03303 RPS 41682 a |
|
| 1 | | 30% of all high-end real estate purchases in major | 2 | | metropolitan areas involved beneficial owners or | 3 | | purchasers who were the subject of previous suspicious | 4 | | activity reports; | 5 | | (2) the United States, unlike Canada and several other | 6 | | jurisdictions, does not require real estate agents and | 7 | | brokers to file suspicious transaction reports; | 8 | | (3) the lack of beneficial ownership transparency is | 9 | | an important factor in facilitating money laundering in | 10 | | real estate; and | 11 | | (4) money laundering in real estate has negative | 12 | | consequences for local communities, including the | 13 | | dislocation of residents from and within major | 14 | | metropolitan areas. | 15 | | Section 5-5. Money Laundering in Real Estate Task Force.
| 16 | | (a) The Money Laundering in Real Estate Task Force is | 17 | | created. The Task Force shall consist of the following | 18 | | members:
| 19 | | (1) 4 members appointed one each by the Speaker of the | 20 | | House of Representatives, the Minority Leader of the House | 21 | | of Representatives, the President of the Senate, and the | 22 | | Minority Leader of the Senate;
| 23 | | (2) the Secretary of Financial and Professional | 24 | | Regulation or the Secretary's designee;
| 25 | | (3) the Director of Revenue or the Director's |
| | | 10200HB1293sam001 | - 5 - | LRB102 03303 RPS 41682 a |
|
| 1 | | designee; | 2 | | (4) 2 members of the faculty of an institution of | 3 | | higher education in the State with subject matter | 4 | | expertise regarding money laundering in real estate, | 5 | | appointed by the Governor;
| 6 | | (5) one expert on real estate tax law, appointed by | 7 | | the Governor; | 8 | | (6) one representative of banking institutions with | 9 | | assets of at least $1,000,000,000, appointed by the | 10 | | Governor; | 11 | | (7) one representative of banking institutions with | 12 | | assets below $1,000,000,000, appointed by the Governor; | 13 | | (8) 2 representatives of a statewide organization | 14 | | representing real estate brokers, appointed by the | 15 | | Governor; and | 16 | | (9) 4 members with backgrounds in real estate, | 17 | | financial institutions, or law, appointed one each by the | 18 | | Speaker of the House of Representatives, the Minority | 19 | | Leader of the House of Representatives, the President of | 20 | | the Senate, and the Minority Leader of the Senate. | 21 | | (b) Initial appointments to the Task Force shall be made | 22 | | as soon as practicable after the effective date of this Act. | 23 | | The Task Force shall hold its first meeting within a | 24 | | reasonable period of time after its members have been | 25 | | appointed and shall convene regularly to carry out its duties | 26 | | and submit the reports required under this Act. At its first |
| | | 10200HB1293sam001 | - 6 - | LRB102 03303 RPS 41682 a |
|
| 1 | | meeting, the Task Force shall elect its chairperson and any | 2 | | other officers from among its members. | 3 | | (c) The Department of Financial and Professional | 4 | | Regulation and the Department of Revenue shall provide | 5 | | administrative and other support to the Task Force. | 6 | | Section 5-10. Duties. The Task Force shall: | 7 | | (1) identify vulnerabilities in the real estate sector | 8 | | that facilitate money laundering; | 9 | | (2) provide guidance to help actors in the real estate | 10 | | sector identify suspicious transactions and report them to | 11 | | the proper authorities; | 12 | | (3) explore the means by which illicit money is | 13 | | channeled into the real estate sector and integrated into | 14 | | the legal economy, including, but not limited to, cash | 15 | | purchases, complex loans, monetary instruments, mortgages, | 16 | | investment institutions, fraudulent appraisals, and | 17 | | anonymous corporate entities; | 18 | | (4) assess the exposure of the residential, | 19 | | industrial, and commercial real estate sectors in Illinois | 20 | | to illicit Russian money, including, but not limited to, | 21 | | luxury real estate in Chicago and nonresidential real | 22 | | estate in downstate communities; and | 23 | | (5) assess real estate due diligence and reporting | 24 | | practices, requirements, and laws in Illinois and | 25 | | recommend changes needed to eliminate systemic |
| | | 10200HB1293sam001 | - 7 - | LRB102 03303 RPS 41682 a |
|
| 1 | | vulnerabilities that facilitate foreign money laundering. | 2 | | Section 5-15. Reports. The Task Force shall submit a | 3 | | report to the Governor and the General Assembly not later than | 4 | | 12 months after the effective date of this Act. The report | 5 | | shall include the Task Force's findings and shall summarize | 6 | | the actions the Task Force has taken and those it intends to | 7 | | take in response to its obligations under the Act. After it | 8 | | submits its initial report, the Task Force shall periodically | 9 | | submit reports to the Governor and the General Assembly as the | 10 | | chairperson of the Task Force deems necessary to apprise those | 11 | | officials of any additional findings made or actions taken by | 12 | | the Task Force. The obligation of the Task Force to submit | 13 | | periodic reports shall continue for the duration of the Task | 14 | | Force. | 15 | | Section 5-20. Dissolution of Task Force; repeal. The Task | 16 | | Force is dissolved on January 1, 2025. This Act is repealed on | 17 | | January 1, 2026. | 18 | | Article 10. | 19 | | Section 10-5. The Illinois Administrative Procedure Act is | 20 | | amended by adding Section 5-45.35 as follows: | 21 | | (5 ILCS 100/5-45.35 new) |
| | | 10200HB1293sam001 | - 8 - | LRB102 03303 RPS 41682 a |
|
| 1 | | Sec. 5-45.35. Emergency rulemaking; Refugee Resettlement | 2 | | Program. To ensure the availability of refugee resettlement | 3 | | program services in the case of an imminent, large-scale | 4 | | refugee resettlement event, emergency rules may be adopted in | 5 | | accordance with Section 5-45 by the Department of Human | 6 | | Services. The adoption of emergency rules authorized by | 7 | | Section 5-45 and this Section is deemed to be necessary for the | 8 | | public interest, safety, and welfare. | 9 | | This Section is repealed one year after the effective date | 10 | | of this amendatory Act of the 102nd General Assembly. | 11 | | Section 10-7. The Election Code is amended by adding | 12 | | Section 1-22 as follows: | 13 | | (10 ILCS 5/1-22 new) | 14 | | Sec. 1-22. The Illinois Elections and Infrastructure | 15 | | Integrity Task Force. | 16 | | (a) The Illinois Elections and Infrastructure Integrity | 17 | | Task Force is created. The Task Force shall consist of the | 18 | | following members: | 19 | | (1) 4 members appointed one each by the Speaker of the | 20 | | House of Representatives, the Minority Leader of the House | 21 | | of Representatives, the President of the Senate, and the | 22 | | Minority Leader of the Senate; | 23 | | (2) one member with subject matter expertise regarding | 24 | | cybersecurity, appointed by the Minority Leader of the |
| | | 10200HB1293sam001 | - 9 - | LRB102 03303 RPS 41682 a |
|
| 1 | | House of Representatives; | 2 | | (3) one member with subject matter expertise regarding | 3 | | voting technology or election integrity, appointed by the | 4 | | Speaker of the House; | 5 | | (4) one member who is an individual with current | 6 | | experience in operational cybersecurity, preferably | 7 | | international operational cybersecurity, appointed by the | 8 | | President of the Senate; | 9 | | (5) one county clerk, appointed by the Minority Leader | 10 | | of the Senate; | 11 | | (6) the Chair of the Board of Election Commissioners | 12 | | for the City of Chicago or the Chair's designee; | 13 | | (7) the county clerk of Cook County; | 14 | | (8) one election administrator, appointed by the | 15 | | Governor; | 16 | | (9) the Executive Director of the State Board of | 17 | | Elections or the Executive Director's designee; | 18 | | (10) the Secretary of State or the Secretary's | 19 | | designee; | 20 | | (11) the Director of the Illinois Emergency Management | 21 | | Agency or the Director's designee; | 22 | | (12) the Secretary of Innovation and Technology or the | 23 | | Secretary's designee; and | 24 | | (13) the Attorney General or the Attorney General's | 25 | | designee. | 26 | | (b) The Task Force shall evaluate and make recommendations |
| | | 10200HB1293sam001 | - 10 - | LRB102 03303 RPS 41682 a |
|
| 1 | | to prepare for and prevent foreign interference in elections | 2 | | in advance of the 2024 election and all future elections in the | 3 | | State and to prepare for and prevent potential cyberattacks on | 4 | | State infrastructure. In carrying out its duties, the Task | 5 | | Force shall prioritize the security of all Illinois residents | 6 | | and cooperation with other states and with law enforcement to | 7 | | protect United States national sovereignty. The Task Force | 8 | | shall submit a report containing its findings and | 9 | | recommendations to the Governor and the General Assembly not | 10 | | later than January 1, 2024. The Task Force shall also submit a | 11 | | report evaluating the 2024 election to the Governor and the | 12 | | General Assembly not later than March 1, 2025. | 13 | | (c) The State Board of Elections shall provide staff and | 14 | | administrative support to the Task Force. | 15 | | (d) The Task Force is dissolved, and this Section is | 16 | | repealed, on June 1, 2025. | 17 | | Section 10-10. The Deposit of State Moneys Act is amended | 18 | | by adding Section 22.7 as follows: | 19 | | (15 ILCS 520/22.7 new) | 20 | | Sec. 22.7. Russian or Belarusian investments prohibited. | 21 | | Notwithstanding any provision of law to the contrary, the | 22 | | State Treasurer shall not invest State money in Russian or | 23 | | Belarusian sovereign debt, Russian or Belarusian | 24 | | government-backed securities, any investment instrument issued |
| | | 10200HB1293sam001 | - 11 - | LRB102 03303 RPS 41682 a |
|
| 1 | | by an entity that is domiciled or has its principal place of | 2 | | business in Russia or Belarus, or any investment instrument | 3 | | issued by a company that is subject to Russian Harmful Foreign | 4 | | Activities Sanctions, as that term is defined under Section | 5 | | 1-110.16 of the Illinois Pension Code, and shall not invest or | 6 | | deposit State money in any bank that is domiciled or has its | 7 | | principal place of business in Russia or Belarus or in any | 8 | | other financial institution that is domiciled or has its | 9 | | principal place of business in Russia or Belarus or that is | 10 | | subject to Russian Harmful Foreign Activities Sanctions. | 11 | | Section 10-20. The Illinois State Police Law of the
Civil | 12 | | Administrative Code of Illinois is amended by changing Section | 13 | | 2605-35 as follows:
| 14 | | (20 ILCS 2605/2605-35) (was 20 ILCS 2605/55a-3)
| 15 | | Sec. 2605-35. Division of Criminal
Investigation. | 16 | | (a) The Division of Criminal
Investigation shall exercise
| 17 | | the following functions and those in Section 2605-30:
| 18 | | (1) Exercise the rights, powers, and duties vested by
| 19 | | law in the Illinois State Police by the Illinois Horse | 20 | | Racing Act of 1975, including those set forth in Section | 21 | | 2605-215.
| 22 | | (2) Investigate the origins, activities, personnel, | 23 | | and
incidents of crime and enforce the criminal laws of | 24 | | this State related thereto.
|
| | | 10200HB1293sam001 | - 12 - | LRB102 03303 RPS 41682 a |
|
| 1 | | (3) Enforce all laws regulating the production, sale,
| 2 | | prescribing, manufacturing, administering, transporting, | 3 | | having in possession,
dispensing, delivering, | 4 | | distributing, or use of controlled substances
and | 5 | | cannabis.
| 6 | | (4) Cooperate with the police of cities, villages, and
| 7 | | incorporated towns and with the police officers of any | 8 | | county in
enforcing the laws of the State and in making | 9 | | arrests and recovering
property.
| 10 | | (5) Apprehend and deliver up any person charged in | 11 | | this State or any other
state with treason or a felony or | 12 | | other crime who has fled from justice and is
found in this | 13 | | State.
| 14 | | (6) Investigate recipients and providers under the | 15 | | Illinois Public Aid
Code and any personnel involved in the | 16 | | administration of the Code who are
suspected of any | 17 | | violation of the Code pertaining to fraud in the
| 18 | | administration, receipt, or provision of assistance and | 19 | | pertaining to any
violation of criminal law; and exercise | 20 | | the functions required under Section
2605-220 in the | 21 | | conduct of those investigations.
| 22 | | (7) Conduct other investigations as provided by law.
| 23 | | (8) Investigate public corruption.
| 24 | | (9) Exercise other duties that may be assigned by the | 25 | | Director in order to
fulfill the responsibilities and | 26 | | achieve the purposes of the Illinois State Police, which |
| | | 10200HB1293sam001 | - 13 - | LRB102 03303 RPS 41682 a |
|
| 1 | | may include the coordination of gang, terrorist, and | 2 | | organized crime prevention, control activities, and | 3 | | assisting local law enforcement in their crime control | 4 | | activities.
| 5 | | (10) Conduct investigations (and cooperate with | 6 | | federal law enforcement agencies in the investigation) of | 7 | | any property-related crimes, such as money laundering, | 8 | | involving individuals or entities listed on the sanctions | 9 | | list maintained by the U.S. Department of Treasury's | 10 | | Office of Foreign Asset Control. | 11 | | (b) (Blank).
| 12 | | (Source: P.A. 102-538, eff. 8-20-21; 102-813, eff. 5-13-22.)
| 13 | | Section 10-30. The Public Funds Investment Act is amended | 14 | | by adding Section 2.3 as follows: | 15 | | (30 ILCS 235/2.3 new) | 16 | | Sec. 2.3. Russian or Belarusian investments prohibited. | 17 | | Notwithstanding any provision of law to the contrary, a public | 18 | | agency shall not invest public funds in Russian or Belarusian | 19 | | sovereign debt, Russian or Belarusian government-backed | 20 | | securities, any investment instrument issued by an entity that | 21 | | is domiciled or has its principal place of business in Russia | 22 | | or Belarus, or any investment instrument issued by a company | 23 | | that is subject to Russian Harmful Foreign Activities | 24 | | Sanctions, as that term is defined under Section 1-110.16 of |
| | | 10200HB1293sam001 | - 14 - | LRB102 03303 RPS 41682 a |
|
| 1 | | the Illinois Pension Code, and shall not invest or deposit | 2 | | public funds in any bank that is domiciled or has its principal | 3 | | place of business in Russia or Belarus or in any other | 4 | | financial institution that is domiciled or has its principal | 5 | | place of business in Russia or Belarus or that is subject to | 6 | | Russian Harmful Foreign Activities Sanctions. | 7 | | Section 10-35. The Illinois Pension Code is amended by | 8 | | changing Section 1-110.16 as follows: | 9 | | (40 ILCS 5/1-110.16) | 10 | | Sec. 1-110.16. Transactions prohibited by retirement | 11 | | systems; companies that boycott Israel, for-profit companies | 12 | | that contract to shelter migrant children, Iran-restricted | 13 | | companies, Sudan-restricted companies, and expatriated | 14 | | entities , companies that are domiciled or have their principal | 15 | | place of business in Russia or Belarus, and companies that are | 16 | | subject to Russian Harmful Foreign Activities Sanctions . | 17 | | (a) As used in this Section: | 18 | | "Boycott Israel" means engaging in actions that are | 19 | | politically motivated and are intended to penalize, | 20 | | inflict economic harm on, or otherwise limit commercial | 21 | | relations with the State of Israel or companies based in | 22 | | the State of Israel or in territories controlled by the | 23 | | State of Israel. | 24 | | "Company" means any sole proprietorship, organization, |
| | | 10200HB1293sam001 | - 15 - | LRB102 03303 RPS 41682 a |
|
| 1 | | association, corporation, partnership, joint venture, | 2 | | limited partnership, limited liability partnership, | 3 | | limited liability company, or other entity or business | 4 | | association, including all wholly owned subsidiaries, | 5 | | majority-owned subsidiaries, parent companies, or | 6 | | affiliates of those entities or business associations, | 7 | | that exist for the purpose of making profit. | 8 | | "Company that is subject to Russian Harmful Foreign | 9 | | Activities Sanctions" means a company that is subject to | 10 | | sanctions under the Russian Harmful Foreign Activities | 11 | | Sanctions Regulations (31 CFR Part 587), any Presidential | 12 | | Executive Order imposing sanctions against Russia, or any | 13 | | federal directive issued pursuant to any such Executive | 14 | | Order. | 15 | | "Contract to shelter migrant children" means entering | 16 | | into a contract with the federal government to shelter | 17 | | migrant children under the federal Unaccompanied Alien | 18 | | Children Program or a substantially similar federal | 19 | | program. | 20 | | "Illinois Investment Policy Board" means the board | 21 | | established under subsection (b) of this Section. | 22 | | "Direct holdings" in a company means all publicly | 23 | | traded securities of that company that are held directly | 24 | | by the retirement system in an actively managed account or | 25 | | fund in which the retirement system owns all shares or | 26 | | interests. |
| | | 10200HB1293sam001 | - 16 - | LRB102 03303 RPS 41682 a |
|
| 1 | | "Expatriated entity" has the meaning ascribed to it in | 2 | | Section 1-15.120 of the Illinois Procurement Code. | 3 | | "Illinois Investment Policy Board" means the board | 4 | | established under subsection (b) of this Section. | 5 | | "Indirect holdings" in a company means all securities | 6 | | of that company that are held in an account or fund, such | 7 | | as a mutual fund, managed by one or more persons not | 8 | | employed by the retirement system, in which the retirement | 9 | | system owns shares or interests together with other | 10 | | investors not subject to the provisions of this Section or | 11 | | that are held in an index fund. | 12 | | "Iran-restricted company" means a company that meets | 13 | | the qualifications under Section 1-110.15 of this Code. | 14 | | "Private market fund" means any private equity fund, | 15 | | private equity funds of funds, venture capital fund, hedge | 16 | | fund, hedge fund of funds, real estate fund, or other | 17 | | investment vehicle that is not publicly traded. | 18 | | "Restricted companies" means companies that boycott | 19 | | Israel, for-profit companies that contract to shelter | 20 | | migrant children, Iran-restricted companies, | 21 | | Sudan-restricted companies, and expatriated entities , | 22 | | companies that are domiciled or have their principal place | 23 | | of business in Russia or Belarus, and companies that are | 24 | | subject to Russian Harmful Foreign Activities Sanctions . | 25 | | "Retirement system" means a retirement system | 26 | | established under Article 2, 14, 15, 16, or 18 of this Code |
| | | 10200HB1293sam001 | - 17 - | LRB102 03303 RPS 41682 a |
|
| 1 | | or the Illinois State Board of Investment. | 2 | | "Sudan-restricted company" means a company that meets | 3 | | the qualifications under Section 1-110.6 of this Code. | 4 | | (b) There shall be established an Illinois Investment | 5 | | Policy Board. The Illinois Investment Policy Board shall | 6 | | consist of 7 members. Each board of a pension fund or | 7 | | investment board created under Article 15, 16, or 22A of this | 8 | | Code shall appoint one member, and the Governor shall appoint | 9 | | 4 members. The Governor shall designate one member of the | 10 | | Board as the Chairperson. | 11 | | (b-5) The term of office of each member appointed by the | 12 | | Governor, who is serving on the Board on June 30, 2022, is | 13 | | abolished on that date. The terms of office of members | 14 | | appointed by the Governor after June 30, 2022 shall be as | 15 | | follows: 2 initial members shall be appointed for terms of 2 | 16 | | years, and 2 initial members shall be appointed for terms of 4 | 17 | | years. Thereafter, the members appointed by the Governor shall | 18 | | hold office for 4 years, except that any member chosen to fill | 19 | | a vacancy occurring otherwise than by expiration of a term | 20 | | shall be appointed only for the unexpired term of the member | 21 | | whom he or she shall succeed. Board members may be | 22 | | reappointed. The Governor may remove a Governor's appointee to | 23 | | the Board for incompetence, neglect of duty, malfeasance, or | 24 | | inability to serve. | 25 | | (c) Notwithstanding any provision of law to the contrary, | 26 | | beginning January 1, 2016, Sections 1-110.15 110.15 and |
| | | 10200HB1293sam001 | - 18 - | LRB102 03303 RPS 41682 a |
|
| 1 | | 1-110.6 of this Code shall be administered in accordance with | 2 | | this Section. | 3 | | (d) By April 1, 2016, the Illinois Investment Policy Board | 4 | | shall make its best efforts to identify all Iran-restricted | 5 | | companies, Sudan-restricted companies, and companies that | 6 | | boycott Israel and assemble those identified companies into a | 7 | | list of restricted companies, to be distributed to each | 8 | | retirement system. | 9 | | These efforts shall include the following, as appropriate | 10 | | in the Illinois Investment Policy Board's judgment: | 11 | | (1) reviewing and relying on publicly available | 12 | | information regarding Iran-restricted companies, | 13 | | Sudan-restricted companies, and companies that boycott | 14 | | Israel, including information provided by nonprofit | 15 | | organizations, research firms, and government entities; | 16 | | (2) contacting asset managers contracted by the | 17 | | retirement systems that invest in Iran-restricted | 18 | | companies, Sudan-restricted companies, and companies that | 19 | | boycott Israel; | 20 | | (3) contacting other institutional investors that have | 21 | | divested from or engaged with Iran-restricted companies, | 22 | | Sudan-restricted companies, and companies that boycott | 23 | | Israel; and | 24 | | (4) retaining an independent research firm to identify | 25 | | Iran-restricted companies, Sudan-restricted companies, | 26 | | and companies that boycott Israel. |
| | | 10200HB1293sam001 | - 19 - | LRB102 03303 RPS 41682 a |
|
| 1 | | The Illinois Investment Policy Board shall review the list | 2 | | of restricted companies on a quarterly basis based on evolving | 3 | | information from, among other sources, those listed in this | 4 | | subsection (d) and distribute any updates to the list of | 5 | | restricted companies to the retirement systems and the State | 6 | | Treasurer. | 7 | | By April 1, 2018, the Illinois Investment Policy Board | 8 | | shall make its best efforts to identify all expatriated | 9 | | entities and include those companies in the list of restricted | 10 | | companies distributed to each retirement system and the State | 11 | | Treasurer. These efforts shall include the following, as | 12 | | appropriate in the Illinois Investment Policy Board's | 13 | | judgment: | 14 | | (1) reviewing and relying on publicly available | 15 | | information regarding expatriated entities, including | 16 | | information provided by nonprofit organizations, research | 17 | | firms, and government entities; | 18 | | (2) contacting asset managers contracted by the | 19 | | retirement systems that invest in expatriated entities; | 20 | | (3) contacting other institutional investors that have | 21 | | divested from or engaged with expatriated entities; and | 22 | | (4) retaining an independent research firm to identify | 23 | | expatriated entities. | 24 | | By July 1, 2022, the Illinois Investment Policy Board | 25 | | shall make its best efforts to identify all for-profit | 26 | | companies that contract to shelter migrant children and |
| | | 10200HB1293sam001 | - 20 - | LRB102 03303 RPS 41682 a |
|
| 1 | | include those companies in the list of restricted companies | 2 | | distributed to each retirement system. These efforts shall | 3 | | include the following, as appropriate in the Illinois | 4 | | Investment Policy Board's judgment: | 5 | | (1) reviewing and relying on publicly available | 6 | | information regarding for-profit companies that contract | 7 | | to shelter migrant children, including information | 8 | | provided by nonprofit organizations, research firms, and | 9 | | government entities; | 10 | | (2) contacting asset managers contracted by the | 11 | | retirement systems that invest in for-profit companies | 12 | | that contract to shelter migrant children; | 13 | | (3) contacting other institutional investors that have | 14 | | divested from or engaged with for-profit companies that | 15 | | contract to shelter migrant children; and | 16 | | (4) retaining an independent research firm to identify | 17 | | for-profit companies that contract to shelter migrant | 18 | | children. | 19 | | No later than 6 months after the effective date of this | 20 | | amendatory Act of the 102nd General Assembly, the Illinois | 21 | | Investment Policy Board shall make its best efforts to | 22 | | identify all companies that are domiciled or have their | 23 | | principal place of business in Russia or Belarus and companies | 24 | | that are subject to Russian Harmful Foreign Activities | 25 | | Sanctions and include those companies in the list of | 26 | | restricted companies distributed to each retirement system. |
| | | 10200HB1293sam001 | - 21 - | LRB102 03303 RPS 41682 a |
|
| 1 | | These efforts shall include the following, as appropriate in | 2 | | the Illinois Investment Policy Board's judgment: | 3 | | (1) reviewing and relying on publicly available
| 4 | | information regarding companies that are domiciled or have | 5 | | their principal place of business in Russia or Belarus and | 6 | | companies that are subject to Russian Harmful Foreign | 7 | | Activities Sanctions, including information provided by | 8 | | nonprofit organizations, research firms, and government | 9 | | entities; | 10 | | (2) contacting asset managers contracted by the
| 11 | | retirement systems that invest in companies that are | 12 | | domiciled or have their principal place of business in | 13 | | Russia or Belarus and companies that are subject to | 14 | | Russian Harmful Foreign Activities Sanctions; | 15 | | (3) contacting other institutional investors that have | 16 | | divested from or engaged with companies that are domiciled | 17 | | or have their principal place of business in Russia or | 18 | | Belarus and companies that are subject to Russian Harmful | 19 | | Foreign Activities Sanctions; and | 20 | | (4) retaining an independent research firm to
identify | 21 | | companies that are domiciled or have their principal place | 22 | | of business in Russia or Belarus and companies that are | 23 | | subject to Russian Harmful Foreign Activities Sanctions. | 24 | | (e) The Illinois Investment Policy Board shall adhere to | 25 | | the following procedures for companies on the list of | 26 | | restricted companies: |
| | | 10200HB1293sam001 | - 22 - | LRB102 03303 RPS 41682 a |
|
| 1 | | (1) For each company newly identified in subsection | 2 | | (d), the Illinois Investment Policy Board , unless it | 3 | | determines by an affirmative vote that it is unfeasible, | 4 | | shall send a written notice informing the company of its | 5 | | status and that it may become subject to divestment or | 6 | | shareholder activism by the retirement systems. | 7 | | (2) If, following the Illinois Investment Policy | 8 | | Board's engagement pursuant to this subsection (e) with a | 9 | | restricted company, that company ceases activity that | 10 | | designates the company to be an Iran-restricted company, a | 11 | | Sudan-restricted company, a company that boycotts Israel, | 12 | | an expatriated entity, or a for-profit company that | 13 | | contracts to shelter migrant children, the company shall | 14 | | be removed from the list of restricted companies and the | 15 | | provisions of this Section shall cease to apply to it | 16 | | unless it resumes such activities. | 17 | | (3) For a company that is domiciled or has its | 18 | | principal place of business in Russia or Belarus, if, | 19 | | following the Illinois Investment Policy Board's | 20 | | engagement pursuant to this subsection (e), that company | 21 | | is no longer domiciled or has its principal place of | 22 | | business in Russia or Belarus, the company shall be | 23 | | removed from the list of restricted companies and the | 24 | | provisions of this Section shall cease to apply to it | 25 | | unless it becomes domiciled or has its principal place of | 26 | | business in Russia or Belarus. |
| | | 10200HB1293sam001 | - 23 - | LRB102 03303 RPS 41682 a |
|
| 1 | | (4) For a company that is subject to Russian Harmful | 2 | | Foreign Activities Sanctions, if, following the Illinois | 3 | | Investment Policy Board's engagement pursuant to this | 4 | | subsection (e), that company is no longer subject to | 5 | | Russian Harmful Foreign Activities Sanctions, the company | 6 | | shall be removed from the list of restricted companies and | 7 | | the provisions of this Section shall cease to apply to it | 8 | | unless it becomes subject to Russian Harmful Foreign | 9 | | Activities Sanctions. | 10 | | (f) Except as provided in subsection (f-1) of this Section | 11 | | the retirement system shall adhere to the following procedures | 12 | | for companies on the list of restricted companies: | 13 | | (1) The retirement system shall identify those | 14 | | companies on the list of restricted companies in which the | 15 | | retirement system owns direct holdings and indirect | 16 | | holdings. | 17 | | (2) The retirement system shall instruct its | 18 | | investment advisors to sell, redeem, divest, or withdraw | 19 | | all direct holdings of restricted companies from the | 20 | | retirement system's assets under management in an orderly | 21 | | and fiduciarily responsible manner within 12 months after | 22 | | the company's most recent appearance on the list of | 23 | | restricted companies. | 24 | | (3) The retirement system may not acquire securities | 25 | | of restricted companies. | 26 | | (4) The provisions of this subsection (f) do not apply |
| | | 10200HB1293sam001 | - 24 - | LRB102 03303 RPS 41682 a |
|
| 1 | | to the retirement system's indirect holdings or private | 2 | | market funds. The Illinois Investment Policy Board shall | 3 | | submit letters to the managers of those investment funds | 4 | | containing restricted companies requesting that they | 5 | | consider removing the companies from the fund or create a | 6 | | similar actively managed fund having indirect holdings | 7 | | devoid of the companies. If the manager creates a similar | 8 | | fund, the retirement system shall replace all applicable | 9 | | investments with investments in the similar fund in an | 10 | | expedited timeframe consistent with prudent investing | 11 | | standards. | 12 | | (f-1) The retirement system shall adhere to the following | 13 | | procedures for restricted companies that are expatriated | 14 | | entities or for-profit companies that contract to shelter | 15 | | migrant children: | 16 | | (1) To the extent that the retirement system believes | 17 | | that shareholder activism would be more impactful than | 18 | | divestment, the retirement system shall have the authority | 19 | | to engage with a restricted company prior to divesting. | 20 | | (2) Subject to any applicable State or Federal laws, | 21 | | methods of shareholder activism utilized by the retirement | 22 | | system may include, but are not limited to, bringing | 23 | | shareholder resolutions and proxy voting on shareholder | 24 | | resolutions. | 25 | | (3) The retirement system shall report on its | 26 | | shareholder activism and the outcome of such efforts to |
| | | 10200HB1293sam001 | - 25 - | LRB102 03303 RPS 41682 a |
|
| 1 | | the Illinois Investment Policy Board by April 1 of each | 2 | | year. | 3 | | (4) If the engagement efforts of the retirement system | 4 | | are unsuccessful, then it shall adhere to the procedures | 5 | | under subsection (f) of this Section. | 6 | | (f-5) Beginning on the effective date of this amendatory | 7 | | Act of the 102nd General Assembly, no retirement system shall | 8 | | invest moneys in Russian or Belarusian sovereign debt, Russian | 9 | | or Belarusian government-backed securities, any investment | 10 | | instrument issued by an entity that is domiciled or has its | 11 | | principal place of business in Russia or Belarus, or any | 12 | | investment instrument issued by a company that is subject to | 13 | | Russian Harmful Foreign Activities Sanctions, and no | 14 | | retirement system shall invest or deposit State moneys in any | 15 | | bank that is domiciled or has its principal place of business | 16 | | in Russia or Belarus. As soon as practicable after the | 17 | | effective date of this amendatory Act of the 102nd General | 18 | | Assembly, each retirement system shall instruct its investment | 19 | | advisors to sell, redeem, divest, or withdraw all direct | 20 | | holdings of Russian or Belarusian sovereign debt and direct | 21 | | holdings of Russian or Belarusian government-backed securities | 22 | | from the retirement system's assets under management in an | 23 | | orderly and fiduciarily responsible manner. | 24 | | Notwithstanding any provision of this Section to the | 25 | | contrary, a retirement system may cease divestment pursuant to | 26 | | this subsection (f-5) if clear and convincing evidence shows |
| | | 10200HB1293sam001 | - 26 - | LRB102 03303 RPS 41682 a |
|
| 1 | | that the value of investments in such Russian or Belarusian | 2 | | sovereign debt and Russian or Belarusian government-backed | 3 | | securities becomes equal to or less than 0.05% of the market | 4 | | value of all assets under management by the retirement system. | 5 | | For any cessation of divestment authorized by this subsection | 6 | | (f-5), the retirement system shall provide a written notice to | 7 | | the Illinois Investment Policy Board in advance of the | 8 | | cessation of divestment, setting forth the reasons and | 9 | | justification, supported by clear and convincing evidence, for | 10 | | its decision to cease divestment under this subsection (f-5). | 11 | | The provisions of this subsection (f-5) do not apply to | 12 | | the retirement system's indirect holdings or private market | 13 | | funds. | 14 | | (g) Upon request, and by April 1 of each year, each | 15 | | retirement system shall provide the Illinois Investment Policy | 16 | | Board with information regarding investments sold, redeemed, | 17 | | divested, or withdrawn in compliance with this Section. | 18 | | (h) Notwithstanding any provision of this Section to the | 19 | | contrary, a retirement system may cease divesting from | 20 | | companies pursuant to subsection (f) if clear and convincing | 21 | | evidence shows that the value of investments in such companies | 22 | | becomes equal to or less than 0.5% of the market value of all | 23 | | assets under management by the retirement system. For any | 24 | | cessation of divestment authorized by this subsection (h), the | 25 | | retirement system shall provide a written notice to the | 26 | | Illinois Investment Policy Board in advance of the cessation |
| | | 10200HB1293sam001 | - 27 - | LRB102 03303 RPS 41682 a |
|
| 1 | | of divestment, setting forth the reasons and justification, | 2 | | supported by clear and convincing evidence, for its decision | 3 | | to cease divestment under subsection (f). | 4 | | (i) The cost associated with the activities of the | 5 | | Illinois Investment Policy Board shall be borne by the boards | 6 | | of each pension fund or investment board created under Article | 7 | | 15, 16, or 22A of this Code. | 8 | | (j) With respect to actions taken in compliance with this | 9 | | Section, including all good-faith determinations regarding | 10 | | companies as required by this Section, the retirement system | 11 | | and Illinois Investment Policy Board are exempt from any | 12 | | conflicting statutory or common law obligations, including any | 13 | | fiduciary duties under this Article and any obligations with | 14 | | respect to choice of asset managers, investment funds, or | 15 | | investments for the retirement system's securities portfolios. | 16 | | (k) It is not the intent of the General Assembly in | 17 | | enacting this amendatory Act of the 99th General Assembly to | 18 | | cause divestiture from any company based in the United States | 19 | | of America. The Illinois Investment Policy Board shall | 20 | | consider this intent when developing or reviewing the list of | 21 | | restricted companies. | 22 | | (l) If any provision of this amendatory Act of the 99th | 23 | | General Assembly or its application to any person or | 24 | | circumstance is held invalid, the invalidity of that provision | 25 | | or application does not affect other provisions or | 26 | | applications of this amendatory Act of the 99th General |
| | | 10200HB1293sam001 | - 28 - | LRB102 03303 RPS 41682 a |
|
| 1 | | Assembly that can be given effect without the invalid | 2 | | provision or application.
| 3 | | If any provision of Public Act 100-551 or its application | 4 | | to any person or circumstance is held invalid, the invalidity | 5 | | of that provision or application does not affect other | 6 | | provisions or applications of Public Act 100-551 that can be | 7 | | given effect without the invalid provision or application. | 8 | | If any provision of Public Act 102-118 this amendatory Act | 9 | | of the 102nd General Assembly or its application to any person | 10 | | or circumstance is held invalid, the invalidity of that | 11 | | provision or application does not affect other provisions or | 12 | | applications of Public Act 102-118 this amendatory Act of the | 13 | | 102nd General Assembly that can be given effect without the | 14 | | invalid provision or application. | 15 | | If any provision of this amendatory Act of the 102nd | 16 | | General Assembly or its application to any person or | 17 | | circumstance is held invalid, the invalidity of that provision | 18 | | or application does not affect other provisions or | 19 | | applications of this amendatory Act of the 102nd General | 20 | | Assembly that can be given effect without the invalid | 21 | | provision or application. | 22 | | (Source: P.A. 102-118, eff. 7-23-21; 102-699, eff. 4-19-22.) | 23 | | Section 10-40. The Board of Higher Education Act is | 24 | | amended by adding Section 9.42 as follows: |
| | | 10200HB1293sam001 | - 29 - | LRB102 03303 RPS 41682 a |
|
| 1 | | (110 ILCS 205/9.42 new) | 2 | | Sec. 9.42. Disclosure of donations from certain Russian, | 3 | | Belarusian, or sanctioned sources. The Board shall require | 4 | | each public institution of higher education to disclose to the | 5 | | Board any endowment or other donation given to the institution | 6 | | from a source associated with any individual or entity listed | 7 | | on the sanctions list maintained by the U.S. Department of | 8 | | Treasury's Office of Foreign Asset Control or any company that | 9 | | is domiciled or has its principal place of business in Russia | 10 | | or Belarus and is on the list of restricted companies | 11 | | developed by the Illinois Investment Policy Board under | 12 | | Section 1-110.16 of the Illinois Pension Code. | 13 | | Article 99. | 14 | | Section 99-97. Severability. The provisions of this Act | 15 | | are severable under Section 1.31 of the Statute on Statutes.
| 16 | | Section 99-99. Effective date. This Act takes effect upon | 17 | | becoming law.".
|
|