Full Text of HB5574 94th General Assembly
HB5574 94TH GENERAL ASSEMBLY
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94TH GENERAL ASSEMBLY
State of Illinois
2005 and 2006 HB5574
Introduced 02/07/06, by Rep. Richard T. Bradley SYNOPSIS AS INTRODUCED: |
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Amends the Illinois Pension Code. Prohibits investments in any entity other than a qualified private market fund. Defines a qualified private market fund as a private market fund that will not knowingly invest assets of a retirement system or pension fund in any company that (i) has facilities or employees in the Republic of the Sudan or (ii) conducts a commercial business in the Republic of the Sudan. Effective immediately, but not earlier than January 27, 2006.
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FISCAL NOTE ACT MAY APPLY | |
PENSION IMPACT NOTE ACT MAY APPLY |
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A BILL FOR
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HB5574 |
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LRB094 15741 AMC 50954 b |
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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 changing | 5 |
| Section 1-110.5 as follows: | 6 |
| (40 ILCS 5/1-110.5) | 7 |
| (For force and effect of certain provisions, see Section 90 | 8 |
| of P.A. 94-79) | 9 |
| (This Section may contain text from a Public Act with a | 10 |
| delayed effective date ) | 11 |
| Sec. 1-110.5. Certain prohibited transactions. | 12 |
| (a) A fiduciary of a retirement system or pension fund | 13 |
| established under this Code shall not transfer or disburse | 14 |
| funds to, deposit into, acquire any bonds or commercial paper | 15 |
| from, or otherwise loan to or invest in any entity other than a | 16 |
| qualified private market fund unless the company charged with | 17 |
| managing the assets of the retirement system or pension fund, | 18 |
| at no additional cost to the fiduciary, certifies to the | 19 |
| fiduciary, in the manner and form established by the Treasurer, | 20 |
| that: | 21 |
| (1) the fund managing company has not loaned to, | 22 |
| invested in, or otherwise transferred any of the retirement | 23 |
| system or pension fund's assets to a forbidden entity any | 24 |
| time after the effective date of this Act; | 25 |
| (2) at least 60% of the retirement system or pension | 26 |
| fund's assets are not invested in forbidden entities at any | 27 |
| time more than twelve months after the effective date of | 28 |
| this Act; | 29 |
| (3) at least 100% of the retirement system or pension | 30 |
| fund's assets are not invested in forbidden entities at any | 31 |
| time more than eighteen months after the effective date of | 32 |
| this Act. |
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HB5574 |
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LRB094 15741 AMC 50954 b |
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| (b) For purposes of this Section: | 2 |
| "Company" is any entity capable of affecting commerce, | 3 |
| including but not limited to (i) a government, government | 4 |
| agency, natural person, legal person, sole proprietorship, | 5 |
| partnership, firm, corporation, subsidiary, affiliate, | 6 |
| franchisor, franchisee, joint venture, trade association, | 7 |
| financial institution, utility, public franchise, provider of | 8 |
| financial services, trust, or enterprise; and (ii) any | 9 |
| association thereof. | 10 |
| "Forbidden entity" means any of the following: | 11 |
| (1) The government of the Republic of the Sudan and any | 12 |
| of its agencies, including but not limited to political | 13 |
| units and subdivisions;
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| (2) Any company that is wholly or partially managed or | 15 |
| controlled by the government of the Republic of the Sudan | 16 |
| and any of its agencies, including but not limited to | 17 |
| political units and subdivisions; | 18 |
| (3) Any company (i) that is established or organized | 19 |
| under the laws of the Republic of the Sudan; (ii) whose | 20 |
| principal place of business is in the Republic of the | 21 |
| Sudan; | 22 |
| (4) Any company (i) identified by the Office of Foreign | 23 |
| Assets Control in the United States Department of the | 24 |
| Treasury as sponsoring terrorist activities; or (ii) | 25 |
| fined, penalized, or sanctioned by the Office of Foreign | 26 |
| Assets Control in the United States Department of the | 27 |
| Treasury for any violation of any United States rules and | 28 |
| restrictions relating to the Republic of the Sudan that | 29 |
| occurred at any time following the effective date of this | 30 |
| Act; and | 31 |
| (5) Any publicly traded company who has been identified | 32 |
| by an independent researching firm that specializes in | 33 |
| global security risk as being a company that owns or | 34 |
| controls property or assets located in, has employees or | 35 |
| facilities located in, provides goods or services to, | 36 |
| obtain goods or services from, has distribution agreements |
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HB5574 |
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LRB094 15741 AMC 50954 b |
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| with, issue credits or loans to, purchase bonds or | 2 |
| commercial paper issued by, or invest in (i) the Republic | 3 |
| of the Sudan; or (ii) any company domiciled in the Republic | 4 |
| of the Sudan; and | 5 |
| (6) Any private market fund that is not a qualified | 6 |
| private market fund.
Any non publicly-traded company that | 7 |
| fails to submit to the fund managing company an affidavit | 8 |
| sworn under oath in which an expressly authorized officer | 9 |
| of the company avers that the company (i) does not own or | 10 |
| control any property or asset located in the Republic of | 11 |
| the Sudan; and (ii) did not transact commercial business in | 12 |
| the Republic of the Sudan. | 13 |
| Notwithstanding the foregoing, the term "forbidden entity" | 14 |
| shall exclude companies, except agencies of the Republic of the | 15 |
| Sudan, who are certified as Non-Government Organizations by the | 16 |
| United Nations, or who engage solely in (i) the provision of | 17 |
| goods and services intended to relieve human suffering or to | 18 |
| promote welfare, health, religious and spiritual activities, | 19 |
| and education humanitarian purposes or otherwise; or (ii) | 20 |
| journalistic activities. | 21 |
| "Private market fund" means any private equity fund, | 22 |
| private equity fund-of-funds, venture capital fund, real | 23 |
| estate fund, or other non-publicly-traded company. | 24 |
| "Qualified private market fund" means any private market | 25 |
| fund in which a retirement system or pension fund established | 26 |
| under this Code: | 27 |
| (A) has made an investment prior to the effective date | 28 |
| of this amendatory Act of the 94th General Assembly so long | 29 |
| as the private market fund provides the retirement system | 30 |
| or pension fund with a written undertaking within 18 months | 31 |
| after the effective date of this amendatory Act that, to | 32 |
| the best of the private market fund's knowledge and based | 33 |
| upon due diligence and information received, the private | 34 |
| market fund has not transferred, loaned, or otherwise | 35 |
| invested and will not knowingly transfer, loan, or | 36 |
| otherwise invest any of the assets of the retirement system |
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HB5574 |
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LRB094 15741 AMC 50954 b |
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| or pension fund in any company that directly or through one | 2 |
| or more subsidiaries (i) has facilities or employees in the | 3 |
| Republic of the Sudan or (ii) conducts a commercial | 4 |
| business in the Republic of the Sudan; or | 5 |
| (B) makes an investment after the effective date of | 6 |
| this amendatory Act of the 94th General Assembly so long as | 7 |
| the private market fund agrees, through an enforceable | 8 |
| written agreement, that it will not knowingly transfer, | 9 |
| loan, or otherwise invest any of the assets of the | 10 |
| retirement system or pension fund in any company that | 11 |
| directly or through one or more subsidiaries (i) has | 12 |
| facilities or employees in the Republic of the Sudan or | 13 |
| (ii) conducts a commercial business in the Republic of the | 14 |
| Sudan or with companies whose principal place of business | 15 |
| is located in the Republic of the Sudan. | 16 |
| (c) In addition to any other penalties and remedies | 17 |
| available under the law of Illinois and the United States, any | 18 |
| transaction that violates the provisions of this Act shall be | 19 |
| void or voidable, at the sole discretion of the fiduciary.
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| (Source: P.A. 94-79, eff. 1-27-06; for force and effect of | 21 |
| certain provisions, see Section 90 of P.A. 94-79.)
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| Section 99. Effective date. This Act takes effect upon | 23 |
| becoming law, but not earlier than January 27, 2006.
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