Full Text of HB2557 96th General Assembly
HB2557enr 96TH GENERAL ASSEMBLY
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| AN ACT concerning public employee benefits.
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| Be it enacted by the People of the State of Illinois,
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| represented in the General Assembly:
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| Section 5. The Illinois Pension Code is amended by adding | 5 |
| Sections 1-113.20 and 1A-108.5 and by changing Section 15-167 | 6 |
| as follows: | 7 |
| (40 ILCS 5/1-113.20 new) | 8 |
| Sec. 1-113.20. Investment strategies; explicit and | 9 |
| implicit costs. Every pension fund, retirement system, and | 10 |
| investment board created under this Code, except those whose | 11 |
| investments are restricted by Section 1-113.2 of this Code, | 12 |
| shall instruct the fund's, system's, or board's investment | 13 |
| advisors to utilize investment strategies designed to ensure | 14 |
| that all securities transactions are executed in such a manner | 15 |
| that the total explicit and implicit costs and total proceeds | 16 |
| in every transaction are the most favorable under the | 17 |
| circumstances. | 18 |
| (40 ILCS 5/1A-108.5 new) | 19 |
| Sec. 1A-108.5. Economic opportunity investments.
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| (a) For the purposes of this Section: | 21 |
| "Economic opportunity investment" means a qualified | 22 |
| investment, managed passively or actively by the pension fund, |
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| that promotes economic development within the State of Illinois | 2 |
| by providing financially prudent investment opportunities in | 3 |
| or through the use of (a) Illinois businesses or (b) | 4 |
| Illinois-based projects that promote the economy of the State | 5 |
| or a region of the State, including without limitation | 6 |
| promotion of venture capital programs, coal and other natural | 7 |
| resource development, tourism development, infrastructure | 8 |
| development, real estate development, and job development | 9 |
| within the State of Illinois, while producing a competitive | 10 |
| rate of return commensurate with the risk of investment. | 11 |
| "Illinois business" means a business, including an | 12 |
| investment adviser, that is headquartered in Illinois. | 13 |
| "Illinois-based project" means an individual project of a | 14 |
| business, including the provision of products and investment | 15 |
| and other services to the pension fund, that will result in the | 16 |
| conduct of business within the State, the employment of | 17 |
| individuals within the State, or the acquisition of real | 18 |
| property located within the State.
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| (b) It is the public policy of the State of Illinois to | 20 |
| encourage the pension funds, and any State entity investing | 21 |
| funds on behalf of pension funds, to promote the economy of | 22 |
| Illinois through the use of economic opportunity investments to | 23 |
| the greatest extent feasible within the bounds of financial and | 24 |
| fiduciary prudence.
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| (c) Each pension fund, except pension funds created under | 26 |
| Articles 3 and 4 of this Code, shall submit a report to the |
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| Governor and the General Assembly by September 1 of each year, | 2 |
| beginning in 2009, that identifies the economic opportunity | 3 |
| investments made by the fund, the primary location of the | 4 |
| business or project, the percentage of the fund's assets in | 5 |
| economic opportunity investments, and the actions that the fund | 6 |
| has undertaken to increase the use of economic opportunity | 7 |
| investments. | 8 |
| (d) Pension funds created under Articles 2, 14, 15, 16, and | 9 |
| 18 of this Act, and any State agency investing funds on behalf | 10 |
| of those pension funds, must make reasonable efforts to invest | 11 |
| in economic opportunity investments. | 12 |
| (e) In making economic opportunity investments, trustees | 13 |
| and fiduciaries must comply with the relevant requirements and | 14 |
| restrictions set forth in Sections 1-109, 1-109.1, 1-109.2, | 15 |
| 1-110, and 1-111 of this Code. Economic opportunity investments | 16 |
| that otherwise comply with this Code shall not be deemed | 17 |
| imprudent solely because they are investments in an Illinois | 18 |
| business or Illinois-based project.
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| (40 ILCS 5/15-167) (from Ch. 108 1/2, par. 15-167)
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| Sec. 15-167. To invest money. To invest the funds of the | 21 |
| system, subject
to the requirements and restrictions set forth | 22 |
| in Sections 1A-108.5, 1-109, 1-109.1,
1-109.2, 1-110, 1-111, | 23 |
| 1-114, 1-115, and 15-158.2(d) of this
Code and to invest in | 24 |
| real estate acquired by
purchase, gift, condemnation or | 25 |
| otherwise, and any office building or buildings
existing or to |
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| be constructed thereon, including any additions thereto or
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| expansions thereof, for the use of the system. The board may | 3 |
| lease surplus
space in any of the buildings and use rental | 4 |
| proceeds for operation,
maintenance, improving, expanding and | 5 |
| furnishing of the buildings or for any
other lawful system | 6 |
| purpose.
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| No bank or savings and loan association shall receive | 8 |
| investment funds
as permitted by this Section, unless it has | 9 |
| complied with the requirements
established pursuant to Section | 10 |
| 6 of "An Act relating to certain investments
of public funds by | 11 |
| public agencies", approved July 23, 1943, as now or
hereafter | 12 |
| amended. The limitations set forth in such Section 6 shall be
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| applicable only at the time of investment and shall not require | 14 |
| the liquidation
of any investment at any time.
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| The board shall have the authority to enter into such | 16 |
| agreements and to
execute such documents as it determines to be | 17 |
| necessary to complete any
investment transaction.
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| All investments shall be clearly held and accounted for to | 19 |
| indicate ownership
by the board. The board may direct the | 20 |
| registration of securities in its
own name or in the name of a | 21 |
| nominee created for the express purpose of
registration of | 22 |
| securities by a national or state bank or trust company
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| authorized to conduct a trust business in the State of | 24 |
| Illinois.
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| Investments shall be carried at cost or at a value | 26 |
| determined in
accordance with generally accepted accounting |
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| principles and accounting
procedures approved by the Board.
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| All additions to assets from income, interest, and | 3 |
| dividends
from investments shall be used to pay benefits,
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| operating and administrative expenses of the system, debt | 5 |
| service,
including any redemption premium, on any bonds issued | 6 |
| by the board,
expenses incurred or deposits required in | 7 |
| connection with such bonds, and
such other costs as may be | 8 |
| provided in accordance with this
Article.
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| (Source: P.A. 90-19, eff. 6-20-97; 90-766, eff. 8-14-98.)
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| Section 99. Effective date. This Act takes effect upon | 11 |
| becoming law.
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